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Currency Wars Yesterday and Today

Author

Listed:
  • Milan Brahmbhatt
  • Otaviano Canuto
  • Swati Ghosh

Abstract

An energetic debate on the danger of a global currency war has flared up in recent months, stoked by a renewed move to “quantitative easing” in the United States, resurgent capital flows to developing countries and strong upward pressure on emerging market currencies. This Economic Premise reviews some of the arguments and concludes that the current U.S. monetary easing is a useful insurance policy against the risk of global deflation. But it is increasing pressure on developing countries to move toward greater monetary policy autonomy and exchange rate flexibility, as well as to undertake the institutional and structural policies needed to underpin such flexibility. Such reforms will take time.
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Suggested Citation

  • Milan Brahmbhatt & Otaviano Canuto & Swati Ghosh, 2010. "Currency Wars Yesterday and Today," World Bank Publications - Reports 10116, The World Bank Group.
    • Handle: RePEc:wbk:wboper:10116
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    References listed on IDEAS

    as
    1. Canuto, Otaviano, 2010. "Toward a Switchover of Locomotives in the Global Economy," World Bank - Economic Premise, The World Bank, issue 33, pages 1-6, September.
    2. Bernanke, Ben S., 1993. "The world on a cross of gold : A review of 'golden fetters: The gold standard and the great depression, 1919-1939'," Journal of Monetary Economics, Elsevier, vol. 31(2), pages 251-267, April.
    3. Otaviano Canuto & Marcelo Giugale, 2010. "The Day After Tomorrow : A Handbook on the Future of Economic Policy in the Developing World," World Bank Publications - Books, The World Bank Group, number 2507.
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    Cited by:

    1. Canuto, Otaviano & Cavallari, Matheus, 2013. "Monetary policy and macroprudential regulation : whither emerging markets," Policy Research Working Paper Series 6310, The World Bank.
    2. 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.
    3. Canuto, Otaviano & Leipziger, Danny, 2012. "Ascent After Decline: Challenges of Growth," World Bank - Economic Premise, The World Bank, issue 75, pages 1-6, February.
    4. Canuto, Otaviano & Cavallari, Matheus, 2013. "Asset Prices, Macroprudential Regulation, and Monetary Policy," World Bank - Economic Premise, The World Bank, issue 116, pages 1-8, May.
    5. Robert W. Włodarczyk, 2014. "Is There a Global Currency War?," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 2(2), pages 21-30.
    6. Yap, Josef T., 2011. "The Political Economy of Reducing the United States Dollar`s Role as a Global Reserve Currency," Discussion Papers DP 2011-13, Philippine Institute for Development Studies.

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    More about this item

    Keywords

    Finance and Financial Sector Development - Debt Markets Finance and Financial Sector Development - Currencies and Exchange Rates Private Sector Development - Emerging Markets Economic Theory and Research Macroeconomics and Economic Growth - Macroeconomic Management;

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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