Vivekanand Jayakumar, Barbara Weiss
Author information
a Sykes College of Business, University of Tampa, Tampa, FL 33606, USA
b St. Petersburg Institute of International Political Economy, St. Petersburg, FL 33701, USA
E-mail: vjayakumar@ut.edu(Vivekanand Jayakumar), bweiss@spiipe.org(Barbara Weiss)
Abstract
The recent financial crisis highlighted some of the underlying defects in the dollar-based reserve system. This paper argues that the era of the US hegemonic stability and unipolarity, which provided the foundation for the dollar’s sustenance as the pre-eminent global reserve currency, has already peaked and the global economy of the future will revolve around a multipolar order. The rise of China, along with other emerging markets, is rapidly redrawing the traditional Western dominated global economic system. The structural challenges facing the American economy along with the extraordinary expansion of Federal Reserve’s balance sheet and the explosion of the US government debt will diminish the attractiveness of the dollar standard going forward. Our analysis suggests that a tripolar currency order—consisting of the dollar, the yuan and the euro—will replace the dollar standard in the coming decades.
international monetary order , international currency , dollar , yuan
Vivekanand Jayakumar, Barbara Weiss. Global Reserve Currency System: Why Will the Dollar Standard Give Way to a Tripolar Currency Order?. Front Econ Chin, 2011, 6(1): 92‒130 https://doi.org/10.1007/s11459-011-0124-6
