The New Multi-polar International Monetary System

Backed by rapid economic growth, growing financial clout, and a newfound sense of assertiveness in recent years, the BRIC countries - Brazil, Russia, India, and China - are a driving force behind an incipient transformation of the world economy awa...

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Bibliographic Details
Main Authors:	Dailami, Mansoor, Masson, Paul
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ANCHOR COUNTRY ASSET CLASS ASSET PRICE BALANCE OF PAYMENTS BALANCE OF PAYMENTS DEFICITS BASKET OF CURRENCIES BENEFICIARIES BILATERAL TRADE BLUE CHIP BONDS CAPITAL ACCOUNT CAPITAL CONTROLS CENTRAL BANK CENTRAL BANKS COMMODITIES COMMODITY COMMODITY EXPORTS COMMODITY PRICES COMPETITIVE ADVANTAGE CREDIBILITY CREDIBILITY PROBLEMS CREDIT EXPANSION CURRENCY CURRENCY CONVERTIBILITY CURRENCY DEPRECIATION CURRENCY HEDGING CURRENCY MARKET CURRENCY MARKETS CURRENCY SWAP CURRENT ACCOUNT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT POSITION CURRENT ACCOUNT SURPLUS DEBT CRISIS DEBT ISSUANCE DEBTS DEPRESSION DEVALUATION DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT ECONOMICS DISINFLATION DOLLAR PEG DOMESTIC INFLATION DOMESTIC MACROECONOMIC POLICIES EARNINGS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC DOWNTURN ECONOMIC GROWTH ECONOMIC ORDER ECONOMIC OUTCOMES ECONOMIC POWER ECONOMIC REFORM ECONOMIC REFORMS EMERGING MARKET EMERGING MARKET COUNTRIES EMERGING MARKET DEBT EMERGING MARKET ECONOMIES EMERGING MARKETS EURO EURODOLLAR MARKETS EXCHANGE RATE EXCHANGE RATE FLEXIBILITY EXCHANGE RATE VOLATILITY EXCHANGE-RATE EXPENDITURE EXPORTER EXPOSURES FEDERAL RESERVE FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INFRASTRUCTURE FINANCIAL INSTABILITY FINANCIAL INSTITUTIONS FINANCIAL MARKET FINANCIAL MARKETS FINANCIAL STABILITY FINANCIAL VOLATILITY FISCAL DEFICITS FLEXIBLE EXCHANGE RATES FLOATING EXCHANGE RATE FLOATING EXCHANGE RATES FOREIGN ASSET FOREIGN ASSET HOLDINGS FOREIGN ASSETS FOREIGN DIRECT INVESTMENT FOREIGN ECONOMIC POLICY FOREIGN ECONOMIC RELATIONS FOREIGN EXCHANGE FOREIGN EXCHANGE MARKETS FOREIGN EXCHANGE RESERVES FREELY FLOATING EXCHANGE RATE GDP GDP PER CAPITA GLOBAL ECONOMY GLOBAL FINANCE GLOBAL FINANCIAL STABILITY GLOBAL IMBALANCES GLOBAL LIQUIDITY GLOBALIZATION GOLD HARMONIZATION INFLATION INFLATION TARGETING INFORMATION SHARING INSURANCE INSURANCE COMPANIES INTEREST RATES INTERNATIONAL BANK INTERNATIONAL COOPERATION INTERNATIONAL CURRENCY INTERNATIONAL DEBT INTERNATIONAL DEVELOPMENT INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL INVESTMENT INTERNATIONAL MONETARY REFORM INTERNATIONAL MONETARY RELATIONS INTERNATIONAL MONETARY SYSTEM INTERNATIONAL RESERVE INTERNATIONAL RESERVES INTERNATIONAL SETTLEMENTS INTERNATIONAL TRADE INVESTMENT FLOWS INVESTMENT INCOME JAPANESE YEN LOAN LOAN AUTHORIZATIONS MACROECONOMIC POLICIES MACROECONOMIC POLICY MAJOR CURRENCY MARKET POWER MARKET PRACTITIONERS MARKET VOLATILITY MATURITY MONETARY CONDITIONS MONETARY COOPERATION MONETARY FUND MONETARY INDEPENDENCE MONETARY INTEGRATION MONETARY POLICIES MONETARY POLICY MONETARY REFORM MONOPOLY MULTIPLE CURRENCIES NATIONAL CURRENCIES NATURAL RESOURCE OIL EXPORTERS OIL EXPORTING COUNTRIES OTHER CURRENCIES OUTPUT OVERVALUATION PENSION PENSION FUNDS PETRODOLLARS POLITICAL POWER POOLING PORTFOLIO PORTFOLIO DIVERSIFICATION POSITIVE ECONOMICS PRIVATE INVESTMENT PRIVATE INVESTORS PRUDENTIAL REGULATION PUBLIC CONFIDENCE RAPID ECONOMIC GROWTH RECESSION REGIONAL INTEGRATION REGULATOR REPUTATION RESERVE CURRENCIES RESERVE CURRENCY SET OF CURRENCIES SOVEREIGNTY SPECIAL DRAWING RIGHTS STABLE EXCHANGE RATES STOCK MARKET STOCK MARKET CAPITALIZATION SUBSTITUTION ACCOUNT SUPPLY SHOCK SURPLUSES SWAP ARRANGEMENTS TAXATION TOTAL EXPORTS TRADE ACCOUNT TRADE BARRIERS TRADE DEFICIT TRADE EXPANSION TRADE SURPLUS TRADING TRADING SYSTEM TRANSACTION TRANSACTION COSTS TREATIES UNDERVALUATION UPWARD PRESSURE WEALTH WORLD ECONOMY WORLD STOCK MARKET WORLD TRADE WORLD TRADE ORGANIZATION
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091203160509 http://hdl.handle.net/10986/4340

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Summary:	Backed by rapid economic growth, growing financial clout, and a newfound sense of assertiveness in recent years, the BRIC countries - Brazil, Russia, India, and China - are a driving force behind an incipient transformation of the world economy away from a US-dominated system toward a multipolar one in which developing countries will have a major say. It is, however, in the international monetary arena that the notion of multipolarity - more than two dominant poles - commands renewed attention and vigorous debate. For much of its history, the quintessential structural feature of the international monetary system has been unipolarity - as American hegemony of initiatives and power as well as its capacity to promote a market-based, liberal order came to define and shape international monetary relations. As other currencies become potential substitutes for the US dollar in international reserves and in cross-border claims, exchange rate volatility may become more severe. There are also risks that the rivalry among the three economic blocs may spill over into something more if not kept in check by a strong global governance structure. While the transition will be difficult and drawn out, governments should take immediate steps to prevent financial volatility by enhancing cooperation on monetary policies, currency market intervention and financial regulation.

The New Multi-polar International Monetary System

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