Global currencies for tomorrow: a global perspective
This report examines the implications of the ongoing global economic power shift for the international monetary system (IMS), focusing on the roles of the US dollar, euro, and renminbi. It finds that while the dollar remains dominant, neither the euro nor the renminbi will soon challenge its supremacy, but they will play increasingly significant international roles. The euro area could benefit from reforms that move away from the current dollar-centric system.
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| Quick Facts | |
|---|---|
| Report location: | source |
| Language: | English |
| Publisher: | Bruegel, Centre d'Etudes Prospectives et d'Informations Internationales |
| Authors: | Agnès Bénassy-quéré, André Sapir, Benjamin Carton, Christophe Destais, Jean Pisani-ferry, Shahin Vallée, Zsolt Darvas, Ignazio Angeloni |
| Time horizon: | 2020 |
| Geographic focus: | Global |
Methods
The research method used in this report includes historical analysis, assessment of current international monetary arrangements, evaluation of economic power distribution, and analysis of currency roles. The report also considers policy-driven and market-driven changes, as well as the implications of various scenarios for the future of the international monetary system.
(Generated with the help of GPT-4)
Key Insights
The international monetary system has evolved into a mix of exchange-rate flexibility, capital mobility, and monetary independence, with the US dollar as the dominant currency. The system has been resilient during crises but has flaws that will be exacerbated by the global economy's rapid transformation. By 2020-30, economic power is likely to be more evenly distributed among the US, euro area, and China. This report assesses the implications of this shift, the factors enabling a currency's international role, and concludes that the euro and renminbi will play increasingly meaningful roles internationally, although they are unlikely to challenge the dollar's supremacy soon. The euro area, in particular, could benefit from moving away from the current dollar-denominated system if it implements governance reform.
(Generated with the help of GPT-4)
Additional Viewpoints
Categories: 2020 time horizon | 2020s time horizon | English publication language | Global geographic scope | capital mobility | currency | currency roles | economic power | economy | euro | exchange-rate flexibility | exchange-rate policy | global economy | governance reform | ims | international monetary system | monetary reforms | renminbi | us dollar