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 How Will the International Monetary System Evolve?

Patrick ARTUS * Conseiller économique, Natixis. Contact :
Isabelle GRAVET ** Économiste, Natixis. Contact :

Will the dollar remain the dominant reserve currency, despite the excessive indebtedness of the United States, and in the absence of a credible substitute for the dollar? Will US monetary policy continue to favor domestic situations without considering the externalities on emerging countries? Will external financing of the US become more difficult? This would lead to a depreciation of the dollar, with the sharp increase in the external debt of the United States, the desire of Europe to keep its savings for investment, and the desire of emerging countries to limit capital outflows. Or are we going to enter a new system to limit the destabilizing variability of international capital flows: selective capital controls, stronger reaction of monetary policies to exchange rates.

Will the International Monetary System continue to be privatized, with an increased role for equity capital flows, and thus for the attractiveness of companies, compared to public debt capital flows?

This paper attempts to answer these different questions which are crucial for the future of the international financial system.