scholarly journals Triffin: dilemma or myth?

2018 ◽  
Author(s):  
Michael Bordo ◽  
Robert McCauley
Keyword(s):  
Triffin Dilemma

scholarly journals A Model of the International Monetary System*

2017 ◽  
Vol 133 (1) ◽  
pp. 295-355 ◽  
Author(s):  
Emmanuel Farhi ◽  
Matteo Maggiori
Keyword(s):  
Simple Model ◽  
Gold Standard ◽  
Supply And Demand ◽  
International Monetary System ◽  
Rate System ◽  
Monetary System ◽  
The World ◽  
The Common ◽  
Triffin Dilemma ◽  
World Supply

AbstractWe propose a simple model of the international monetary system. We study the world supply and demand for reserve assets denominated in different currencies under a variety of scenarios: a hegemon versus a multipolar world; abundant versus scarce reserve assets; and a gold exchange standard versus a floating rate system. We rationalize the Triffin dilemma, which posits the fundamental instability of the system, as well as the common prediction regarding the natural and beneficial emergence of a multipolar world, the Nurkse warning that a multipolar world is more unstable than a hegemon world, and the Keynesian argument that a scarcity of reserve assets under a gold standard or at the zero lower bound is recessionary. Our analysis is both positive and normative.

The New Triffin Dilemma

2018 ◽  
Vol 50 (4) ◽  
pp. 691-698 ◽  
Author(s):  
Ann E. Davis
Keyword(s):  
Multinational Corporations ◽  
Deposit Insurance ◽  
Jel Classification ◽  
Size Of Government ◽  
Treasury Bonds ◽  
Shadow Banks ◽  
Order Of Magnitude ◽  
Triffin Dilemma ◽  
Federal Deposit Insurance

According to Pozsar, there is a new kind of “Triffin Dilemma.” Due to rising inequality, a shrinking numbers of large banks, and a ceiling on Federal Deposit Insurance Corporation (FDIC) insured deposits, there is a shortage of “safe assets.” The private supply of safe assets has occurred through the system of shadow banks, and is based on repos, or Treasury Bonds. But the supply of US Treasury bonds is limited by the ceiling on public debt, and is constrained by neoliberal theories of limits to the size of government. As a result, there is a presumed shortage of safe assets, just when the levels of inequality have increased the order of magnitude of assets under management which are in need of protection. There are also large accumulations of cash pools by large multinational corporations, often held overseas to evade taxes. The private provision of safe assets tends to reduce liquidity and increase costs of information, potentially leading to financial instability. Possible resolutions of this issue include (1) progressive taxes to reduce the size of the cash pools, (2) an increase in the ceiling for insured deposits, and (3) increasing support by the Fed for the role of “market maker of last resort.” This paper concludes with the implications of each alternative. JEL Classification: B5, E44, G01, P1

scholarly journals The International Monetary and Financial System

2019 ◽  
Vol 11 (1) ◽  
pp. 859-893 ◽  
Author(s):  
Pierre-Olivier Gourinchas ◽  
Hélène Rey ◽  
Maxime Sauzet
Keyword(s):  
United States ◽  
World Economy ◽  
Balance Sheet ◽  
The United States ◽  
Exorbitant Privilege ◽  
International Currencies ◽  
The Us ◽  
The World ◽  
Us Dollar ◽  
Triffin Dilemma

International currencies fulfill different roles in the world economy, with important synergies across those roles. We explore the implications of currency hegemony for the external balance sheet of the United States, the process of international adjustment, and the predictability of the US dollar exchange rate. We emphasize the importance of international monetary spillovers and of the exorbitant privilege, and we analyze the emergence of a new Triffin dilemma.

The Current Account Version of the Triffin Dilemma

2016 ◽  
Vol 44 (2) ◽  
pp. 171-182 ◽  
Author(s):  
Michael D. Bordo ◽  
Robert N. McCauley
Keyword(s):  
Current Account ◽  
Triffin Dilemma ◽  
The Current Account
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