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Financial Crisis And Changes In The International Monetary System. Implications For Euro

Author

Listed:
  • Agata Osinska

    (University of Warsaw)

  • Grzegorz Tchorek

    (University of Warsaw)

Abstract

Having an international currency brings some benefits but also important obstacles. Undoubtedly, it is positive to have international money but the process of achieving the status of global money may lead to some costs connected with the appreciation of the euro. The main goal of this article is to show that one of the probable scenarios of the post-crisis adjustment in the international monetary system is the risk of the euro overvaluation. It can be a result of the diminishing role of the U.S. economy and the growing role of the euro as an international currency. Paradoxically, thanks to its success, the euro can be exposed to the overvaluation with important implication for the euro area countries as well as candidate countries.

Suggested Citation

  • Agata Osinska & Grzegorz Tchorek, 2010. "Financial Crisis And Changes In The International Monetary System. Implications For Euro," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 5(2), pages 9-19, December.
    • Handle: RePEc:pes:ierequ:v:5:y:2010:i:2:p:9-19
    DOI: 10.12775/EQUIL.2010.021
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    References listed on IDEAS

    as
    1. Michael D. Bordo & Harold James, 2008. "A Long Term Perspective on the Euro," NBER Working Papers 13815, National Bureau of Economic Research, Inc.
    2. Fratzscher, Marcel, 2009. "What explains global exchange rate movements during the financial crisis?," Journal of International Money and Finance, Elsevier, vol. 28(8), pages 1390-1407, December.
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