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


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


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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    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


    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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