A multilateral currency union removes the intraregional exchange rates but not the union rate variability with the rest of the world. The intraregional exchange rate variability is thus latent. A two-step procedure is developed to measure the variability. The measured variables are used to model...

This paper examines the relationship between currency internationalisation and economic structure. It argues that the hierarchical and asymmetric architecture of the international monetary system imposes a "survival constraint" upon non-centre countries that obliges them to generate net inflows...

Following an analysis of the forces behind the global capital flows paradox" observed in the era of advancing financial globalization, this paper sets out to investigate the opportunity costs of self-insurance through precautionary reserve holdings. We reject the idea of reserves as low-cost...

This paper sets out to investigate the forces behind the so-called "global capital flows paradox" and related "dollar glut" observed in the era of advancing financial globalization. The supposed paradox is that the developing world has increasingly come to pursue policies that result in current...

Money is used as a store of value, a medium of exchange and a unit of account. Most recent analyses of currency choice in an international setting have focused on the denomination of reserves - the store of value role. However, public data are only aggregate and exclude several countries. This...

This paper focuses on the requirements and features of a successful monetary union on the basis of the optimum currency area theory, the "logical roadmap" for integration as proposed by Balassa as well as the economic and institutional framework of the European Economic and Monetary Union (EMU)....

This paper investigates the spread of what started as a crisis at the core of the global financial system to emerging economies. While emerging economies had exhibited some resilience through the early stages of the financial turmoil that began in the summer of 2007, they have been hit hard...

This paper investigates the United States dollar's role as the international currency of choice as a key contributing factor in critical global developments that led to the crisis of 2007-09, and considers the future role of the dollar as the global economy emerges from that crisis. It is argued...

It is commonplace to link neoclassical economics to 18th- or 19th-century physics and its notion of equilibrium, of a pendulum once disturbed eventually coming to rest. Likewise, an economy subjected to an exogenous shock seeks equilibrium through the stabilizing market forces unleashed by the...

Currency market intervention-cum-reserve accumulation has emerged as the favored selfinsurance strategy in recipient countries of excessive private capital inflows. This paper argues that capital account management represents a less costly alternative line of defense deserving renewed...