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NOTES
Preface
1. http://www.ft.com/intl/cms/s/0/eda8f512-eaae-11df-b28d-00144feab49a.html#axzz1yvtyoj3P
Chapter 3
1. This contribution was written in my capacity as State Secretary at the German Federal Ministry of Finance (2008–2011), i.e., before I became a Member of the Executive Board of the European Central Bank (January 2012). I would like to thank Johannes Wolff, Christian Dalhaus, and Dr. Rouven Klein from the staff of the Federal Ministry of Finance for assisting me in the research for this article and their valuable contributions in discussing the subject matter.
2. This section is an edited and abbreviated version of information provided by the Bundesbank (Bundesbank, 2008).
3. For a more detailed assessment of the euro’s role as a reserve currency in a multipolar currency system, see also “The Future” section of this chapter.
Chapter 6
1. The views expressed herein are those of the authors and should not be attributed to the International Monetary Fund, its executive board, or its management.
2. See Mohamma
d, N’Diaye, and Unteroberdoerster (2010).
3. See Geng and N’Diaye (forthcoming).
4. See Huang (2010) and Huang and Tao (2010).
5. Typically found in markets with very few sellers.
6. See Blanchard and Giavazzi (2005), Kujis (2005), Modigliani and Cao (2004), Aziz and Cui (2007), Wei and Zhang (2009), and Bai and Qian (2009).
7. Lending rates are subject to a floor, and deposit rates are subject to a ceiling.
Chapter 7
1. See James Rickards, Currency Wars: The Making of the Next Global Crisis (New York: Portfolio/Penguin, 2011).
2. Ibid.
3. Guido Mantega as quoted in Jonathan Wheatley, “Brazil in ‘Currency War’ Alert,” Financial Times, September 27, 2010.
4. “Currency Composition of Official Foreign Exchange Reserves,” International Monetary Fund, Washington, DC, http://www.imf.org/external/np/sta/cofer/eng/cofer.pdf. March, 2012.
5. Ibid.
6. Barry Eichengreen, Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System (New York, Oxford University Press, 2011).
7. “Enhancing International Monetary Stability—A Role for the SDR?,” International Monetary Fund, Washington, DC, January 2011, http://www.imf.org/external/np/pp/eng/2011/010711.pdf.
8. “Factsheet, Special Drawing Rights (SDRs),” International Monetary Fund, Washington, DC, September 13, 2011, http://www.imf.org/external/np/exr/facts/sdr.ht.
Chapter 8
1. Timothy Green, The Ages of Gold (London: Thomson Reuters GFMS, 2007), p. 29.
2. Ibid., p. 187.
3. Christopher Howgego, “The Supply and Use of Money in the Roman World, 200 BC–AD 300,” Journal of Roman Studies 82 (1992), pp. 1–31.
4. Green, The Ages of Gold, p. 187.
5. Ibid., p. 241.
6. John Maynard Keynes, The Economic Consequences of the Peace (1919) http://www.econlib.org/library/YPDBooks/Keynes/kynsCP.html page VI.14.
Chapter 9
1. Brett Arends, “IMF Bombshell: Age of America Nears End,” MarketWatch, April 25, 2011, http://www.marketwatch.com/story/imf-bombshell-age-of-america-about-to-end-2011-04-25.
2. World Economic Outlook, April 2011, International Monetary Fund, Washington, DC, http://www.imf.org/external/pubs/ft/weo/2011/01/.
3. Ibid.; calculated in purchasing power parity (PPP) terms.
4. Giles Chance, China and the Credit Crisis: The Emergence of a New World Order (Hoboken, NJ: John Wiley & Sons, 2010), p. 182.
5. C. Fred Bergsten, “The Dollar and the Renminbi,” May 23, 2007, http://www.iie.com/publications/testimony/testimony.cfm?ResearchID5747.
6. Bureau of Economic Analysis, U.S. International Transactions.
7. Paul Krugman, “Trade and Wages, Reconsidered,” February 2008, http://www.princeton.edu/~pkrugman/pk-bpea-draft.pdf.
8. David H. Autor, David Dorn, and Gordon H. Hanson, “The China Syndrome: Local Labor Market Effects of Import Competition in the United States,” May 2012, http://economics.mit.edu/files/6613.
9. Ibid.
10. Barry Eichengreen, “Why the Dollar’s Reign Is Near an End,” Wall Street Journal, March 1, 2011.
11. Daniel Flynn and Noah Barkin, “G20 Names China in Call for Greater FX Flexibility,” Reuters, November 4, 2011, http://www.reuters.com/article/2011/11/04/us-g20-plan-idUSTRE7A31KQ20111104.
12. Na Jeong-ju, “China Should Let Yuan Appreciate for World,” Korea Times, October 21, 2010, http://www.koreatimes.co.kr/www/news/biz/2010/10/127_74947.html.
13. Robert Johnson, “A Paradox of Risk Aversion: Structural Uncertainty and a Dysfunctional International Monetary System,” Challenge 54, No. 3 (May/June 2011), pp. 38–55.
14. Bergsten, “The Dollar and the Renminbi.”
15. Carl E. Walter, “China’s Reserves Are Worthless Because They Can’t Use Them,” China Boom, http://chinaboom.asiasociety.org/period/overdrive/0/233.
16. Martin Wolf, “How China Could Yet Fail Like Japan,” Financial Times, June 14, 2011, http://www.ft.com/intl/cms/s/0/6247d8e2-96b8-11e0-baca-00144feab49a.html.
17. Ibid.
18. George Soros, “China Must Fix the Global Currency Crisis,” Financial Times, October 7, 2010, http://www.ft.com/intl/cms/s/0/f4dd9122-d22a-11df-8fbe-00144feabdc0.html#axzz1x23A4WI4.
19. Wolf, “How China Could Yet Fail Like Japan.”
20. Bergsten, “The Dollar and the Renminbi.”
21. Yao Yang, “Almost Everything We’ve Done Is Illegal,” China Boom, http://chinaboom.asiasociety.org/period/prospects/0/176.
22. Chance, China and the Credit Crisis, p. 181.
23. Barry Eichengreen, “What China Is After Financially,” East Asia Forum, January 30, 2011, http://www.eastasiaforum.org/2011/01/30/what-china-is-after-financially/.
24. Barry Eichengreen, “The Renminbi as an International Currency,” January 2010, http://emlab.berkeley.edu/~eichengr/renminbi_international_1–2011.pdf.
25. Barry Eichengreen and Marc Flandreau, “The Federal Reserve, the Bank of England, and the Rise of the Dollar as an International Currency, 1914–39,” BIS Working Paper no. 329, November 2010.
26. Eichengreen, “What China Is After Financially.”
27. Eichengreen and Flandreau, “The Federal Reserve.”
28. Ibid.
29. Martin Wolf, video discussion at Peterson Institute of Eclipse: Living in the Shadow of China’s Economic Dominance, by Arvind Subramanian, http://www.piie.com/events/event_detail.cfm?EventID5198&Media.
30. Mohamed A. El-Erian, video discussion at Peterson Institute of Eclipse, http://www.piie.com/events/event_detail.cfm?EventID=198&Media.
31. Michael Pettis, “Some Predictions for the Rest of the Decade,” China Financial Markets, http://mpettis.com/2011/08/some-predictions-for-the-rest-of-the-decade/.
INDEX
Please note that index links point to page beginnings from the print edition. Locations are approximate in e-readers, and you may need to page down one or more times after clicking a link to get to the indexed material.
f indicates figure
A
Alexander the Great, 5, 10
American Business (C. Jackson Grayson, Jr., and Carla O’Dell), 10–11
Apple, 36
Arabian dinar, 4, 24, 29, 202–203
Arabs, ancient, 5
Asia:
export value added in GDP, 166f
factors in GDP growth, 164, 164f
future preeminence of, 144
potential reserve currency from country in, 88
U.S. dollar status in, 80
Asian central banks, 85, 86
Asian crisis (1997-1998), 47, 84
currency reserves accumulation after, 226–227
and role of IMF, 193–194
Asmussen, Jörg, v
Athenian drachma, 5
Athens, ancient, 5
Australia:
GDP per hour worked in, 33f
productivity growth in, 31f
Austria, 9
in EMU, 98
GDP per hour worked in, 33f
productivity growth in, 31f
B
Balance of payments crises, 110–111
Banfield, Edward, 132
Banfield, Laura, 132
Bank for International Settlements (BIS), 80
Bank loans, in China, 46–47
Bank of England, balance sheet of, 214f
Banks:
eurozone country banks, 9, 28, 60, 136–137
forex trades of, xix–xx
(See also Central banks)
Barre Plan, 92
Basel Accord, 93
Belgium:
in EMU, 98
GDP per hour worked in, 33f
government expenditures in, 140f
productivity growth in, 31f
productivity in, 19
Bernanke, Ben, 1, 126, 198, 211, 212, 217
BIS (Bank for International Settlements), 80
&nbs
p; Bismarck, Otto von, 134
Bolivia, gold bought by, 214
Boockvar, Peter, v
Brazil:
future role of, 120
in G-20, 190
GDP of, 120
in global economic decisions, xii
gold bought by, 214
money pouring into, xiii
Brazilian real, xxii
Breadth of markets:
and success as international currency, 22
and the U.S. dollar, 44, 45f
Bretton Woods Agreement, xiv, xvii–xix, 208–209
fixed-exchange-rate system of, 92, 192
and gold standard, 208–209
IMF created by, 192
and modern currency issues, 127
BRIC nations:
in global economic decisions, xii
money pouring into, xiii
(See also individual nations)
British pound sterling:
as early trade and reserve currency, 6–7
fall against the dollar, 20
and gold standard, 24
preeminent role in world order, xviii
as reserve currency, 29, 114, 131f
reserves held in, 82, 82f, 101f, 117f
worldwide use of, 112
British sovereign (coin), 203
Bryan, William Jennings, 27
Budgetary surveillance (eurozone), 105–106
Bundesbank, 152
Byzantine Empire, 5
Byzantine nomisma, 202
Byzantine solidus, 4, 24, 29
C
Canada:
debt as percent of GDP, 55
fertility rate in, 43f
GDP per hour worked in, 33f
life expectancy in, 44f
net debt outstanding, 23f
productivity growth in, 18, 18f, 31f
Capital flow settlement currency, 80
Capitalism:
in China, 88, 89
and markets, 128
Central banks:
Asian, 85
Chinese, 51–53
COFER data on, 81
crisis-fighting spending by, xi–xii
diversification away from U.S. dollar, 84–86
European, 96, 97
euros accumulated by, xii
and financial crisis of 2008, 198
in foreign exchange market, xix–xxii