Former world Bank chief economist wants to replace the US dollar came to a single world supervolute, arguing that it will create more stable global financial system.
"The dominance of the dollar – the root cause of the global financial and economic crisis, said Justin Yifu Lin [in the seminar; approx. mixednews] politico in Brussels-analytical center "Bruegel", the Solution to this is to replace the national currencies of the world".
Lin, now a Professor at Peking University and a leading Chinese government adviser, said that expanding the basket of major reserve currencies – dollar, Euro, Japanese yen and pound sterling – will not be an adequate solution to the problem of liquidation of consequences of the financial crisis. The internationalization of the Chinese currency also is not the answer, he said.
Lin appealed to the international community, especially the US and the EU, to play a leading role in currency and infrastructure initiatives. In order to stimulate the global economy, he proposed to launch the "global infrastructure initiative" to eliminate bottlenecks in poor and developing countries. This measure, he said, would provide opportunities and developed economies.
"China in the implementation of these plans can take on only a supporting role, said Lin. – Must be approved by the US and EU. And I think the "Big twenty" – an ideal venue for discussing such ideas."
The concept of the world "supervolute", linked to a basket of currencies, was periodically discussed by world leaders, and has also received the endorsement of Nobel prize winner 2001 Joseph Stiglitz. Supervolute can bind to a single currency, but the interconnectedness of world financial markets and fears of volatility that may occur as a result of the binding system to the single currency, has reduced the popularity of this idea.
Professor of trade policy at Cornell University Eswar Prasad, functioning as a senior fellow at the Brookings Institution, disagreed with the fact that supervalu will protect global financial system from crashing, similar recession of 2008, which plunged the world economy into the most dangerous crisis since the great depression of the thirties.
"Flexible exchange rates provide a useful shock-absorbing mechanism, especially in new market economies, said Tuesday in an interview with China Daily Prasad, who is a former Director of the financial research Department of the International monetary Fund. – More effective financial regulation and improved international management, along with improved fiscal and structural policies, would strengthen financial stability in the world to achieve much more than the single currency".
The arguments in favor of a global currency once again came during the October fiscal impasse in the US that caused involuntary "closing" of the government.
"Perhaps now is the time to fooled world thinking about building genericindiaviagra the world," said 14 October comment news Agency "Xinhua". The article stated that the establishment of the order of refusal from reliance on the dollar by a new international reserve currency would avoid the negative impact on the rest of the world governmental deadlock in Washington.
In March 2009 the head of the Central Bank of China Zhou Xiao Chuan called for the creation of new "supranational reserve currency" that would replace the dollar. In published on the website of the people's Bank of China article, Zhou wrote that the international reserve currency "disconnected from individual countries" and "able to remain stable in the long term", will bring the world financial system more than current reliance on the dollar.
In unison with the foregoing, the chief currency of the analytical Department at HSBC David bloom said that a change in monetary policy the United States "will bring the currencies of developing countries fluctuations and lead to financial instability".
Chief economist of the government "think tanks" of the "Chinese center for international economic exchange", Chen Wenling said, "a Supranational currency may be a new direction of development of the world financial system. It also requires the cooperation of different countries to coordinate their macroeconomic policies."
And bloom, and Chen said that China needs to play a more prominent role in international financial management. But bloom noticed that the international financial organizations it is difficult to arrive at agreed conclusions on the question of how to improve the monetary system.
According to him, this year we are expecting a strengthening of the yuan, despite the appreciation of the US dollar and the internationalisation of the Chinese currency will accelerate when the government decides to further open the capital market.
Researcher of the European centre for international political economy in Brussels, Michal Krol did not agree that the world economic crisis was caused by the hegemony of the us dollar. The emergence of other currencies, he said, including the Euro, the yuan and the yen, has created a situation in which it becomes necessary the presence of a configuration mechanism.
"I don't think that the largest economies and their currencies are ready at the moment to the introduction of a supranational currency – said hare, – Neither the EU nor China has so far neither financial markets nor monetary systems that were robust, reliable, predictable and well-functioning to act as the cornerstone of the world system. But now really is the time to formulate the basic principles of international monetary management".
Executive Director of the Brussels College Madariaga at the Foundation of Europe Pierre Defraigne commented on infrastructure offer Lin: "It is excellent, but the problem is how to translate these plans into reality, connecting through an effective international mechanism for countries that need such infrastructural construction and those that have sufficient foreign exchange reserves".
- 02-05-2020Four of the Americans ' Outlook: what will happen to the world economy and the US economy
- 21-02-2020The phantom menace: the non-obvious consequences of the depletion of nature for the economy
- 24-07-2019Look at the future of business: five trends postremoval era
- 23-06-2019Industrial revolution 4.0: how the Internet of things is changing business and how to stay afloat