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|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 33 44 07 81 00
Fax: + 33 1 44 07 83 01
Web page: http://centredeconomiesorbonne.univ-paris1.fr/
More information through EDIRC
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.:
- Dobson, Wendy & Masson, Paul R., 2009. "Will the renminbi become a world currency?," China Economic Review, Elsevier, vol. 20(1), pages 124-135, March.
- 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 & AgnÃ¨s BÃ©nassy-QuÃ©rÃ© & Benjamin Carton & Christophe Destais & Zsolt Darvas & Jean Pisani-Ferry & AndrÃ© Sapir & Shahin VallÃ©e, . "Global currencies for tomorrow: a European perspective," Blueprints, Bruegel, number 592, November.
- 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 444, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Eichengreen, Barry, 2012.
"Exorbitant Privilege: The Rise and Fall of the Dollar,"
Oxford University Press, number 9780199642472, March.
- Eichengreen, Barry, 2011. "Exorbitant Privilege: The Rise and Fall of the Dollar," OUP Catalogue, Oxford University Press, number 9780199596713, March.
- 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.
- 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.
- 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.
- Jean Pisani-Ferry & Yongding Yu & AgnÃ¨s BÃ©nassy-QuÃ©rÃ©, 2011. "Reform of the international monetary system: Some concrete steps," Policy Contributions 516, Bruegel.
- Eichengreen, Barry, 1987.
"Hegemonic Stability Theories of the International Monetary System,"
CEPR Discussion Papers
193, C.E.P.R. Discussion Papers.
- Barry Eichengreen, 1987. "Hegemonic Stability Theories of the International Monetary System," NBER Working Papers 2193, National Bureau of Economic Research, Inc.
- Benjamin J. Cohen, 2009. "Dollar Dominance, Euro Aspirations: Recipe for Discord?," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 741-766, 09.
- 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.
When requesting a correction, please mention this item's handle: RePEc:mse:cesdoc:13016. 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: (Lucie Label)
If references are entirely missing, you can add them using this form.