Can the euro challenge the supremacy of the U.S. dollar as a global currency? From the time Europe’s joint money was born, many have predicted that it would soon achieve parity with the dollar or possibly even surpass it. In reality, however, the euro has remained firmly planted in the dollar’s shadow. The essays collected in this volume explain why. Because of America’s external deficits and looming foreign debt, the dollar can never be as dominant as it once was. But Europe’s money is unable to mount an effective challenge. The euro suffers from a number of critical structural deficiencies, including an anti-growth bias that is built into the institutions of the monetary union and an ambiguous governance structure that sows doubts among prospective users. As recent events have demonstrated, members of the euro zone remain vulnerable to financial crisis. Moreover, lacking a single voice, the bloc continues to punch below its weight in monetary diplomacy. The world seems headed toward a leaderless monetary order, with several currencies in contention but none clearly dominant.
This collection distils the views of one of the world’s leading scholars in global currency, and will be of considerable interest to students and scholars of international finance and international political economy.
Table of Contents
Introduction Part 1: The Global Currency System 1. Life at the Top: International Currencies in the Twenty-First Century 2. The Euro and Transatlantic Relations Part 2: The Euro Challenge 3. EMU and the Dollar: Who Threatens Whom? 4. Global Currency Rivalry: Can The Euro Ever Challenge the Dollar? 5. Enlargement and the International Role of the Euro 6. The Euro in a Global Context: Challenges and CapacitiesDollar Dominance, Euro Aspirations: Recipe for Discord? 7. Dollar Dominance, Euro Aspirations: Recipe for Discord? Part 3: Glimpses of the Future 8. A One-and-a-Half Currency System 9. Toward a Leaderless Currency System 10. The International Monetary System: Diffusion and Ambiguity
Benjamin J. Cohen is Louis G. Lancaster Professor of International Political Economy at the University of California, Santa Barbara. A specialist in the political economy of international money and finance, he is the author of twelve previous books, including most recently Global Monetary Governance (Routledge 2008).
Jerry Cohen is the authoritative commentator on key currencies in the global monetary system. This collection of essays on the subject is knowledgeable, insightful, and extraordinarily timely.
Andrew Walter, London School of Economics, UK
"The international monetary system is currently being transformed dramatically by a complicated array of economic and political pressures. Jerry Cohen remains the best guide to understanding how that system, and its key European component, is likely to evolve in coming years. The clarity of his prose matches the brilliance of his many insights. This volume deserves a prominent place on undergraduate and graduate student reading lists, but its contents will enlighten any interested reader."
Louis W. Pauly, University of Toronto, Canada
Benjamin Jerry Cohen learned international economics from me. I have learned international political economy from him. You will too by reading the excellent collection of papers in this volume.
Peter B. Kenen, Princeton University, USA