International Monetary System and Global Financial Cycles
Paolo Baffi Lecture

Rey, H.


Abstract:
This lecture describes how the current international monetary system work. The dollar is the hegemonic currency, the United States plays the role of a world banker and insurer, there are global financial cycles that affect domestic financial systems, even for countries who have floating exchange rate regimes. In such a world we should have macroprudential policies as sophisticated as inflation targeting policies. The international monetary system is not stable as we may be facing a new Triffin dilemma. I speculate that world powers could compete using increasingly sophisticated cross-border payment technologies to expand the network of countries under their monetary and financial influence. This could have profound geopolitical implications.



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*ERC Advanced Grant INFIMOP

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