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The Political Economy of Reducing the US Dollar’s Role as a Global Reserve Currency

Author

Listed:
  • Yap, Josef T.

    (Asian Development Bank Institute)

Abstract

Many have argued that the major source of the existing global macroeconomic imbalances are the twin deficits of the United States (US). However, there is still a debate about whether the global imbalances indeed pose a significant threat to the world economy. This paper analyzes whether current efforts in East Asia in terms of financial and monetary cooperation and rebalancing of economic growth could significantly mitigate the adverse impacts of a global system that will still be dominated by the US dollar in the foreseeable future. It also explains why the People’s Republic of China is unlikely to make significant unilateral adjustments to reduce global macroeconomic imbalances.

Suggested Citation

  • Yap, Josef T., 2011. "The Political Economy of Reducing the US Dollar’s Role as a Global Reserve Currency," ADBI Working Papers 302, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:0302
    as

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    References listed on IDEAS

    as
    1. Emmanuel Farhi & Ricardo Caballero & Pierre-Olivier Gourinchas, "undated". "Financial Crash, Commodity Prices and Global Imbalances," Working Paper 20933, Harvard University OpenScholar.
    2. Richard N. Cooper, 2007. "Living with Global Imbalances," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(2), pages 91-110.
    3. K. Yudaeva., 2010. "On the Exchange Rate Policy," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    4. Brahmbhatt, Milan & Canuto, Otaviano & Ghosh, Swati, 2010. "Currency Wars Yesterday and Today," World Bank - Economic Premise, The World Bank, issue 43, pages 1-6, December.
    5. Serven, Luis & Nguyen, Ha, 2010. "Global imbalances before and after the global crisis," Policy Research Working Paper Series 5354, The World Bank.
    6. Ignazio Visco, 2010. "Global Imbalances, the Financial Crisis and the International Monetary System," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 11(1), pages 69-82, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    east asia; global macroeconomic imbalances; rebalancing economic growth; financial and monetary cooperation;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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