Dilemmas of Creating a Reserve Currency in the Conditions of Growing Debt of the Issuing Countries

• Autorzy: Joanna Bogołębska
• Języki publikacji: EN

Abstrakty

EN

This paper attempts to answer the question what are the limits of credibility of the reserve currency creation system in the conditions of growing debt of the issuer country. This relation is perceived in the literature of the subject through the prism of the so-called safe asset - its characteristics and demand-supply conditions. The author expands this approach by pointing to the emergence of the so-called Triffin Dilemma II in contemporary international finance, as an analogy to the Triffin Dilemma I existing in the 1960s. Triffin Dilemma sees the dilemmas of creating a reserve currency from the point of view of the credibility of the system in which the issuer is a net debtor. The main reason for the dilemmas related to the creation of the reserve currency is change in the structure of net investment positions of two groups of countries: developed and developing countries, which - along with asymmetry in participation in debt and global GDP - led to a reorientation of the role of these countries as net creditors and net debtors.(original abstract)

Słowa kluczowe

EN

Currencies; Investment; Fiscal policy

PL

Waluta; Inwestycje; Polityka fiskalna

• Czasopismo: Przedsiębiorczość i Zarządzanie
• Rocznik: 2018
• Numer: t. 19, z. 1, cz. 1 Financial, Accounting and Economic Aspects of Contemporary Management
• Strony: 7--18

Twórcy

autor

Joanna Bogołębska

• University of Lodz, Poland

Bibliografia

• Caballero R. (2009), Global imbalances and financial fragility, "American Economic Review", No. 99(2).
• Caballero R., Ferhi E., Gourinchas P. (2015), Global imbalances and currency wars at the zero lower bound, "NBER Working Paper", No. 21670.
• Caruana J., Friedman B., King S., Shirakawa M. (2015), Debt, "BIS Papers", No. 80.
• Cline W. (2005), The United States as a debt nation, Peterson Institute for International Economics.
• Dang T., Gorton G., Holmstrom B. (2012), Ignorance, debt and financial crisis, Yale University and Massachusetts Institute of Technology.
• Daniel B. (2001), A fiscal theory of currency crises, "International Economic Review", Vol. 42, No. 4.
• Goldberg L. (2011), The international role of the dollar: does it matter if this changes? "Federal Reserve Bank of New York Staff Reports", No. 522.
• Gourinchas P., Jeanne O. (2012), Global safe assets, "BIS Working Paper", No. 399.
• Landau J. (2013), Global liquidity: public and private, Federal Reserve Bank of Kansas City, Economic Symposium.
• Obstfeld M. (2011), The international monetary system: living with asymmetry, "NBER Working Paper", No. 17641.
• Prasad E. (2011), Role reversal in global finance, Federal Reserve Bank of Kansas City, Economic Symposium.
• Steiner A. (2012), Reserve accumulation and financial crises: from individual protection to systemic risk, University of Osnabrueck.
• Teunissen J., Akkerman A. (2006), Global imbalances and the US debt problem, Fondad The Hague.
• Warnock F. (2010), How dangerous is US government debt? The risk of a sudden spike in US interest rates, "Capital Flows Quarterly", Council on Foreign Relations, June.
• Wojtyna A. (2013), Zmiany instytucjonalne w reakcji na obecny kryzys, PWE, Warszawa.