The New Multi-polar International Monetary System
Backed by rapid economic growth, growing financial clout, and a newfound sense of assertiveness in recent years, the BRIC countries - Brazil, Russia, India, and China - are a driving force behind an incipient transformation of the world economy awa...
Main Authors: | , |
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Language: | English |
Published: |
2012
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Subjects: | |
Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091203160509 http://hdl.handle.net/10986/4340 |
Summary: | Backed by rapid economic growth, growing
financial clout, and a newfound sense of assertiveness in
recent years, the BRIC countries - Brazil, Russia, India,
and China - are a driving force behind an incipient
transformation of the world economy away from a US-dominated
system toward a multipolar one in which developing countries
will have a major say. It is, however, in the international
monetary arena that the notion of multipolarity - more than
two dominant poles - commands renewed attention and vigorous
debate. For much of its history, the quintessential
structural feature of the international monetary system has
been unipolarity - as American hegemony of initiatives and
power as well as its capacity to promote a market-based,
liberal order came to define and shape international
monetary relations. As other currencies become potential
substitutes for the US dollar in international reserves and
in cross-border claims, exchange rate volatility may become
more severe. There are also risks that the rivalry among the
three economic blocs may spill over into something more if
not kept in check by a strong global governance structure.
While the transition will be difficult and drawn out,
governments should take immediate steps to prevent financial
volatility by enhancing cooperation on monetary policies,
currency market intervention and financial regulation. |
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