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Building a stable and equitable global monetary system

Author

Listed:
  • Bilge Erten
  • José Antonio Ocampo

Abstract

This paper argues that SDRs should become a more relevant instrument of international monetary cooperation. This requires transforming them into a pure reserve asset and the IMF into a fully SDR-funded institution. SDRs would then be issued counter-cyclically and treated as deposits of countries in the IMF, which can in turn lend to countries. This approach would correct basic deficiencies of the current global monetary system. Complementary reforms include a substitution account for an orderly and smooth transition from major reserve currencies to SDRs, and the issuance of SDR-denominated bonds as an alternative to other major short-term assets.

Suggested Citation

  • Bilge Erten & José Antonio Ocampo, 2012. "Building a stable and equitable global monetary system," Working Papers 118, United Nations, Department of Economics and Social Affairs.
  • Handle: RePEc:une:wpaper:118
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    File URL: http://www.un.org/en/development/desa/papers/2012
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    Cited by:

    1. Matthias Bruckner, 2013. "Effectively addressing the vulnerabilities and development needs of small island developing States," CDP Background Papers 017, United Nations, Department of Economics and Social Affairs.

    More about this item

    Keywords

    Special drawing rights; international monetary system; innovative development finance; governance of the IMF;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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