The impact of yuan internationalization on the euro-dollar exchange rate
We study the implication of a multipolarization of the international monetary system on cross-currency volatility. More specifically, we analyze whether the internationalization of the yuan could modify the impact of asset supply and trade shocks on the euro-dollar exchange rate, within a three-country, three-currency portfolio model. Our static model shows that the internationalization of the yuan (defined as a rise in the yuan in international portfolios) would be either neutral or stabilizing for the euro-dollar rate, whatever the exchange-rate regime of China. Moving to a dynamic, stock-flow framework, we show that the internationalization of the yuan would make exchange-rate variations more efficient to stabilize net foreign asset positions after a trade shock.
|Date of creation:||Feb 2013|
|Publication status:||Published in Documents de travail du Centre d'Economie de la Sorbonne 2013.16 - ISSN : 1955-611X. 2013|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00801100|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eichengreen, Barry, 2012.
"Exorbitant Privilege: The Rise and Fall of the Dollar,"
Oxford University Press, number 9780199642472, December.
- Eichengreen, Barry, 2011. "Exorbitant Privilege: The Rise and Fall of the Dollar," OUP Catalogue, Oxford University Press, number 9780199596713, December.
- Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2004. "The revived Bretton Woods system," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(4), pages 307-313.
- Wendy Dobson & Paul R. Masson, 2007.
"Will the Renminbi Become a World Currency?,"
Working Papers Series
10, Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto, revised Dec 2007.
- Jean Pisani-Ferry & Yongding Yu & Agnès Bénassy-Quéré, 2011.
"Reform of the international monetary system: Some concrete steps,"
- Agnès Bénassy-Quéré & Jean Pisani-Ferry & Yu Yongding, 2011. "Reform of the International Monetary System: Some Concrete Steps," La Lettre du CEPII, CEPII research center, issue 309.
- Agnès Bénassy-Quéré & Jean Pisani-Ferry & Yongding Yu, 2011. "Reform of the international monetary system: Some concrete steps," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00685901, HAL.
- Barry Eichengreen, 1987.
"Hegemonic Stability Theories of the International Monetary System,"
NBER Working Papers
2193, National Bureau of Economic Research, Inc.
- Eichengreen, Barry, 1987. "Hegemonic Stability Theories of the International Monetary System," CEPR Discussion Papers 193, C.E.P.R. Discussion Papers.
- Jacques Mazier & Gnanonobodom Tiou‐Tagba Aliti, 2012. "World Imbalances And Macroeconomic Adjustments: A Three‐Country Stock‐Flow Consistent Model With Fixed Or Flexible Prices," Metroeconomica, Wiley Blackwell, vol. 63(2), pages 358-388, 05.
- André Sapir & Jean Pisani-Ferry, 2011.
"Global Currencies for Tomorrow: A European Perspective,"
ULB Institutional Repository
2013/174278, ULB -- Universite Libre de Bruxelles.
- Ignazio Angeloni & Agnès Bénassy-Quéré & Benjamin Carton & Christophe Destais & Zsolt Darvas & Jean Pisani-Ferry & André Sapir & Shahin Vallée, . "Global currencies for tomorrow: a European perspective," Blueprints, Bruegel, number 592, Autumn.
- Ignazio Angeloni & Agnès Bénassy-Quéré & Benjamin Carton & Zsolt Darvas & Christophe Destais & Ludovic Gauvin & Jean Pisani-Ferry & André Sapir & Shahin Vallée, 2011. "Global currencies for tomorrow: A European perspective," European Economy - Economic Papers 2008 - 2015 444, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Benjamin J. Cohen, 2009. "Dollar Dominance, Euro Aspirations: Recipe for Discord?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 741-766, 09.
- N/A, 2011. "Reform of the International Monetary System," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(2), pages 185-193, May.
When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00801100. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD)
If references are entirely missing, you can add them using this form.