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Beyond the dollar

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  • Peter B., Kenen

Abstract

The international reserve regime based mainly on the US dollar has served the world well for decades, but it faces an uncertain future as the economic hegemony of the United States is increasingly challenged by the emergence of new economic powers. The regime is flawed fundamentally, moreover, because additions to the supply of the main reserve asset require the United States to run balance-of-payments deficits, which tend to undermine confidence in the dollar. This paper proposes a transformation of the reserve regime that would cause Special Drawing Rights (SDRs) issued by the International Monetary Fund to become the main reserve asset. An orderly transition would be achieved by creating a Substitution Account into which official holders of dollars could deposit them in exchange for SDRs.

Suggested Citation

  • Peter B., Kenen, 2011. "Beyond the dollar," Journal of Policy Modeling, Elsevier, vol. 33(5), pages 750-758, September.
    • Handle: RePEc:eee:jpolmo:v:33:y:2011:i:5:p:750-758
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    References listed on IDEAS

    as
    1. Peter B. Kenen, 2010. "Renovation of the Global Reserve Regime: Concepts and Proposals," Working Papers 1227, Princeton University, Department of Economics, Center for Economic Policy Studies..
    2. Peter B. Kenen, 2010. "The Substitution Account as a First Step Toward Reform of the International Monetary System," Policy Briefs PB10-6, Peterson Institute for International Economics.
    3. Peter B. Kenen, 2010. "Reforming the Global Reserve Regime: The Role of a Substitution Account," International Finance, Wiley Blackwell, vol. 13(1), pages 1-23, March.
    4. Peter B. Kenen, 2010. "Renovation of the Global Reserve Regime: Concepts and Proposals," Working Papers 1227, Princeton University, Department of Economics, Center for Economic Policy Studies..
    5. repec:pri:cepsud:208kenen is not listed on IDEAS
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