Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28948
Authors: 
Campanella, Edoardo
Year of Publication: 
2009
Series/Report no.: 
Economics Discussion Papers 2009-46
Abstract: 
Tiny changes in the American monetary policy can have dramatic effects on the rest of the world because of its double role of national and international currency. This is what I call the Triffin dilemma, an ever green concept in international finance. In the paper I show how it works through three examples: price of commodities, dollarization, and the international financial position of the US. I argue that to solve this situation, it would be important to create a more democratic monetary system, in which all the countries have a decision weight. In particular, I think that globalization and regionalization should be the two forces leading towards the new monetary system. The main economies should adopt the same currency through a system of fixed exchange rates (global money); developing countries should create regional monetary unions (regional money), preserving the real exchange rate as real shock absorber, but gaining in terms of time consistency and credibility.
Subjects: 
Triffin dilemma
global currency
regional monetary union
dollarization
JEL: 
F33
Creative Commons License: 
http://creativecommons.org/licenses/by-nc/2.0/de/deed.en
Document Type: 
Working Paper

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