International Liquidity Generation and Exchange Rate Stabilization in a Bipolar International Regime
Aubin, Christian
International Liquidity Generation and Exchange Rate Stabilization in a Bipolar International Regime - 2001.
20
The upsurge of the euro opens the possibility that two international currencies coexist. This paper focuses on the potential discordance between the demand and supply structures of international liquidity within a bipolar monetary regime. We show that the adjustment process intended to stabilize exchange rates is never neutral with respect to international liquidity. Controlling the effects of such a process on the dynamics of liquidity requires a specific rule between international currency issuers to share the burden of adjustment. Classification JEL: F33, F42
International Liquidity Generation and Exchange Rate Stabilization in a Bipolar International Regime - 2001.
20
The upsurge of the euro opens the possibility that two international currencies coexist. This paper focuses on the potential discordance between the demand and supply structures of international liquidity within a bipolar monetary regime. We show that the adjustment process intended to stabilize exchange rates is never neutral with respect to international liquidity. Controlling the effects of such a process on the dynamics of liquidity requires a specific rule between international currency issuers to share the burden of adjustment. Classification JEL: F33, F42
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