China vs. U.S.: IMS Meets IPS


Farhi, Emmanuel, and Matteo Maggiori. “China vs. U.S.: IMS Meets IPS.” AEA Papers and Proceedings, 2019, 109, 476-81.


Currently both the International Monetary System (IMS) and the International Price Systems (IPS) are dominated by the U.S. The emergence of China, both as reserve currency and as a currency of invoicing, is likely to disrupt this status quo. We provide a framework to understand the forces that will shape this transition and identify sources of instability. We highlight the risk of an abrupt shift triggered by a run on the dollar.


Paper | Media Coverage: Yahoo Finance

Last updated on 05/21/2019