Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70927
Authors: 
Benassy-Quere, Agnes
Forouheshfar, Yeganeh
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4149
Abstract: 
We study the implication of a multipolarization of the international monetary system on cross-currency volatility. More specifically, we analyze whether the internationalization of the yuan could modify the impact of asset supply and trade shocks on the euro-dollar exchange rate, within a three-country, three-currency portfolio model. Our static model shows that the internationalization of the yuan (defined as a rise in the yuan in international portfolios) would be either neutral or stabilizing for the euro-dollar rate, whatever the exchange-rate regime of China. Moving to a dynamic, stock-flow framework, we show that the internationalization of the yuan would make exchange-rate variations more efficient to stabilize net foreign asset positions after a trade shock.
Subjects: 
China
yuan
exchange-rate regime
euro
dollar
JEL: 
F31
F33
Document Type: 
Working Paper

Files in This Item:
File
Size
425.45 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.