two effects interact, as we demonstrate. We use a three-region world model as a framework for alternative steady … reveals potential quantitatively significant benefits for the euro area, at the cost of the US and (to a lesser degree) Japan …

We propose a simple model of the international monetary system. We study the world supply and demand for reserve assets … denominated in different currencies under a variety of scenarios: a Hegemon vs. a multipolar world; abundant vs. scarce reserve … instability of the system, as well as the common prediction regarding the natural and beneficial emergence of a multipolar world …