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N° 2011-04b |
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| March 2011 |
| What International Monetary System for a Fast-Changing World Economy? |
Agnès Bénassy-Quéré
Jean Pisani-Ferry |
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| Though the renminbi is not yet convertible, the international monetary regime has already
started to move towards a 'multipolar' system, with the dollar, the Chinese currency and the
euro as its key likely pillars. This shift corresponds to the long-term evolution of the balance
of economic weight in the world economy. Such an evolution may mitigate some flaws of the
present (non-) system, such as the rigidity of key exchange rates, the asymmetry of balanceof-
payments adjustments or what remains of the Triffin dilemma. However it may exacerbate
other problems, such as short-run exchange rate volatility or the scope for ‘currency wars’,
while leaving key questions unresolved, such as the response to capital flows global liquidity
provision. Hence, in itself, a multipolar regime can be both the best and the worst of all
regimes. Which of these alternatives will materialise depends on the degree of cooperation
within a multilateral framework. |
Non-technical summary  |
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Résumé
non-technique
en français |
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| Full text |
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| International monetary system; capital controls |
Keywords |
| F33; F32 |
JEL classification |
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