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The US dollar, the euro, and the yen: An evaluation of their present and future status as international currencies

Author

Listed:
  • Beckmann, Rainer
  • Born, Jürgen
  • Kösters, Wim

Abstract

The process of European integration and especially the introduction of the euro as the single currency for up to now 12 member countries of the EU in 1999 may alter the existing clear currency hierarchy. The euro area is comparable in size to the US with respect to GDP and even exceeds the US regarding the share in world trade. Thus questions arise of whether the international monetary system turns out to be bipolar in the long run or whether the yen can also play its part. It turns out that real activity, size and sophistication of financial markets, monetary and financial stability and inertia are the most prominent characteristics making a currency to be preferred on a world-wide level. We thus conclude that the integration and the development of European financial markets are of special importance for a stronger international role of the dollar, but that the historical experience of only gradually changing supremacy of international currencies still applies.

Suggested Citation

  • Beckmann, Rainer & Born, Jürgen & Kösters, Wim, 2001. "The US dollar, the euro, and the yen: An evaluation of their present and future status as international currencies," MPRA Paper 5274, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:5274
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    File URL: https://mpra.ub.uni-muenchen.de/5274/1/MPRA_paper_5274.pdf
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    References listed on IDEAS

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    1. Jan J.G. Lemmen, 1998. "Integrating Financial Markets in the European Union," Books, Edward Elgar Publishing, number 1399, April.
    2. Schüler, Martin, 2002. "Integration of the European market for e-finance: evidence from online brokerage," ZEW Discussion Papers 02-24, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Gabriele Galati & Kostas Tsatsaronis, 2001. "The impact of the euro on Europe's financial markets," BIS Working Papers 100, Bank for International Settlements.
    4. Beckmann, Rainer & Eppendorfer, Carsten & Neimke, Markus, 2002. "Deepening European Financial Integration: Theoretical Considerations and Empirical Evaluation of Growth and Employment Benefits," MPRA Paper 5272, University Library of Munich, Germany.
    5. Buch, Claudia M., 2000. "Financial Market Integration in the US: Lessons for Europe?," Kiel Working Papers 1004, Kiel Institute for the World Economy (IfW).
    6. Buch, Claudia M. & DeLong, Gayle, 2004. "Cross-border bank mergers: What lures the rare animal?," Journal of Banking & Finance, Elsevier, vol. 28(9), pages 2077-2102, September.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Shams, Rasul, 2005. "Dollar-Euro Exchange Rate 1999-2004 : Dollar and Euro as International Currencies," HWWA Discussion Papers 321, Hamburg Institute of International Economics (HWWA).
    2. Heinemann, Friedrich & Jopp, Mathias, 2002. "The benefits of a working European Retail Market for financial services: Report to European Financial Services Round Table," ZEW Expertises, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, number 110486.

    More about this item

    Keywords

    International currencies; Dollar; Euro;

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F30 - International Economics - - International Finance - - - General

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