The Euro as Reserve Currency

Paper Summary:

This paper discusses the current decline of the US dollar. It specifically discusses the projections that the euro may eventually supplant the dollar as the dominant reserve currency in the world. The paper examines current currency trends in terms of the past, as well as in terms of the economic and political factors surrounding both currencies.

Table of Contents:
History
Current Economic and Political Factors
The Future
Conclusion

From the Paper:

"The main problem with the dollar is its increasingly apparent instability as a result of the increasing debts of the United States government. This appears to indicate a rising crisis, which also lowers the current confidence in the currency. The fact that authors during 2004 already began to indicate the low confidence of the underground sector in the dollar currency appears to indicate that the currency might face future troubles. Concomitantly, the fact that a viable currency to replace it is available appears to indicate that this may become a reality, as predicted by an increasing amount of reports."

Sample of Sources Used:

• Chinn, Menzie & Frankel. 2005. Will the Euro eventually surpass the Dollar as leading international reserve currency? National Bureau of Economic Research, July. http://www.nber.org/papers/w11510.pdf
• Galati, Gabriele & Wooldridge, Philip. 2006. The Euro as Reserve Currency: A challenge to the pre-eminence of the US Dollar? Bank for International Settlements: Monetary and Economic Dept., October. http://www.bis.org/publ/work218.pdf?noframes=1
• Gross, Daniel. 2004. Euro Trash: Even drug dealers are giving up on the dollar. Slate Magazine, Dec. 28. http://www.slate.com/id/2111504/
• Nielsen, Bo. 2007. Dollar may extend rally on Bets U.S. to contain subprime losses. Bloomberg.com, Dec. 18. http://www.bloomberg.com/apps/news?pid=20601101&sid=aFeKleEvhHtI&refer=japan
• Paul, Ron. 2007. The World's Reserve Currency. LewRockwell.com, Jan 2. http://www.lewrockwell.com/paul/paul358.html

More papers on The Euro as Reserve Currency:

• Analytical Essay # 128820 : "The Role of Hegemony in the Status of the Euro"
• Term Paper # 100267 : "The Euro vs. the Dollar"
• Research Paper # 92053 : "Dollar Hegemony and World Trade Adjustment"

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