The development of the international monetary system in terms of its components
Journal Title: Visnyk Ternopilskoho natsionalnoho ekonomichnoho universytetu - Year 2016, Vol 4, Issue
Abstract
The article proposes definitions and functions of the international monetary system. International monetary proto-systems and instutionalized systems are considered from a historical perspective. The characteristic features, challenges and critical moments of Paris, Genoa, Bretton Woods and the Jamaican monetary systems are highlighted. The current state of the international monetary system is analyzed in terms of its basic components. The world money commodity is viewed as the first component of the international monetary system and is examined as an aggregate of all instruments that can be used in international payments. The ratio of reserve currencies is estimated; the proposals of a single world currency or strengthening the role of the SDR are considered. It is specified that the world is not yet ready to introduce a single currency because its maximum effectiveness could be achieved only on conditions of ‘optimal currency zone’ which is somewhat utopian today on a global scale. The existing and prospective regional currency alliances are described. The second component of the international monetary system is considered to be an exchange rate. A classification of exchange rate arrangements according to the IMF is developed and countries’ exchange rates are reviewed. It is emphasized that after the Jamaican Conference, the expectations of the economic community for a gradual transition to floating exchange rates is not generally justified because about 66% of IMF members use certain modes of fixing or managing exchange rates. The third component of the international monetary system is the currency market. Its key indicators are as follows: average daily turnover, the most popular currency pairs, geographical spread. The essence of the fourth component of the international monetary system is its regulatory component, which is represented by the international monetary and financial institutions. The challenges and causes of instability of the current international monetary system are considered. The study suggests possible areas for reforming the international monetary system and estimates the potential of multicurrency standard as a basic element of a new global currency system.
Authors and Affiliations
Mariia Lyzun
Keywords
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