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On The Welfare Benefits of an International Currency

Is it beneficial for a country's currency to be used internationally? And, if so, can we quantify the benefit? Since the emergence of the euro, there has been great interest in the consequences of a transfer of the US dollar's premier international role to the euro. Building on recent adva...

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Bibliographic Details
Main Author: Kannan, Prakash
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2007
Series:IMF Working Papers
Subjects:
Monetary Base
Price Level
Macroeconomics: Consumption
Payment Systems
Macroeconomics
Standards
Currencies
Wealth
Saving
Demand For Money
Monetary Economics
Prices
Economics
Government And The Monetary System
Inflation
Money And Monetary Policy
Monetary Systems
Monetary Policy, Central Banking, And The Supply Of Money And Credit: General
Regimes
Money
Consumption
Deflation
Money Supply
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:Is it beneficial for a country's currency to be used internationally? And, if so, can we quantify the benefit? Since the emergence of the euro, there has been great interest in the consequences of a transfer of the US dollar's premier international role to the euro. Building on recent advancements in the literature on search models of money, this paper presents a novel model-based approach towards assessing the welfare benefits associated with the international use of a country's currency. The welfare gain for the Euro area in having the euro internationally used ranges from 1.7% to 2.1% of consumption
Physical Description:37 pages
ISBN:9781451866131

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