Dmitriy Kondratov 1
  • 1 Institute of Europe, 11-3B, Mokhovaya street, Moscow, 125993, Russia

Recent Approaches to Reforming the Global Monetary System

2015. Vol. 19. No. 1. P. 128–157 [issue contents]

Current status and prospects for the global monetary system today are the subject of intense debate. Many experts suggest that in the coming years it will face serious changes. Their driving force is the growing disparity configuration of modern monetary system, formed the main features in the middle of the last century and based on the US dollar as the key currency, a new alignment of forces in the world economy. On the one hand, the United States due to chronic problems in the economy, especially the so-called «twin deficits» balance of payments and the federal budget, now have only limited capacity to maintain the leading position of the dollar in the global monetary system. One consequence of this was, in particular, occurs rapidly in recent years devaluation of the dollar, which significantly hampered its use as a reserve and settlement currency. On the other hand, in the global economy, new big players, especially the Asian countries whose currencies are significantly strengthened, but at the global level, while virtually not represented.

How important is the problem of reserve currency? More precisely, the problem of performing this role, the dollar and its stability as a reserve currency? In answering this question, many foreign researchers note that by itself the status of «international currency» has less impact on the real economy than the exchange rate. The problem of the dollar as a reserve currency would not be so topical in recent years, if not for its direct connection with the strength ening of international payments imbalances – rising US current account deficit, on the one hand, and an increase in the positive balance of many other countries, particularly in Asia and the – exporters of oil – on the other. The stability of such a situation is entirely determined by the willingness of central banks, particularly Asian, accumulate their reserves in the form of US assets and thereby finance the deficit of the country. The global financial crisis triggered by the US financial system crisis further aggravated the problem of dollar dominance and called into question the stability of the leading positions in the dollar. Possible ways and mechanisms for restructuring the world monetary system to a multi-standard, as well as the prospects for the US dollar as a reserve currency are discussed below.

Citation: Kondratov D. (2015) Aktual'nye podkhody k reformirovaniyu mirovoy valyutnoy sistemy [Recent Approaches to Reforming the Global Monetary System]. HSE Economic Journal, vol. 19, no 1, pp. 128-157 (in Russian)
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