a column by Eiji Ogawa and Makoto Muto for VOX: CEPR’s Policy Portal
Given the US dollar’s historical prominence in international currency systems, it can be argued that a large part of its present-day importance is due to inertia.
This column analyses the determinants of the utility of four international currencies, focusing on the liquidity premium. It shows that while inertia does have a strong effect on a currency’s utility, a liquidity shortage can also reduce the utility of an international currency.
Continue reading
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment