60 likes | 85 Views
Explore monetary integration around the world, including European and Latin American systems, currency arrangements, and the shift towards a global reserve currency. Discover the impact on trade, finance, and the changing global power structure.
E N D
International Monetary Integration Antony Mueller
Currency Arrangements • Avoiding the volatility of exchange rate movements • Currency pegs, currency baskets, asymmetrical and symmetrical arrangements • Single currency areas • Role of monetary and fiscal policy
European Monetary Integration • Beginning in the 1950s (Bretton Woods) • 1973 European Monetary System • 1999 Common Currency in Banking • 2002 The Euro as a physical currency • Arrangements: strict independence of European Central Bank, strict orientation to price stability, budget deficit controls, violations
Global reserve currency • Dollar accounts for 65 per cent of global international reserves (weight of US economy about 17 per cent) • Currency diversification is going on into euro, and gold • Asian central bank increased their dollar reserves • New movement into gold observable
Monetary Integration in Latin America • Dominance of US dollar orientation • Dollar orientation is not congruent with trade • Lack of fiscal and monetary control • Trade integration requires monetary integration • Lack of institutions buildings
Regionalism and Globalization • Demise of the nation state? • New global issues (finance, trade, environment, terrorism) • Increased relevance of micro regions along with increased relevance of macro regions • “made by BMW” • Impact on global power structure