Monetary Order Research Articles

PREFERENCE FACTORS REGARDING CENTRAL BANK DIGITAL CURRENCY ANONYMITY: BEHAVIOURAL, CULTURAL, OR INSTITUTIONAL

Central Bank Digital Currencies (CBDCs) offer a model of monetary order that potentially reduces the social costs associated with money circulation compared to private cryptocurrencies, which are energy-intensive. However, the success of CBDCs is contingent on design choices, which may conflict with policy goals and consumer preferences. A key challenge is the balance between transaction privacy/anonymity and payment convenience/functionality. Preferences for privacy/convenience are influenced by cultural attitudes, behavioural factors, and trust in institutions. This research seeks to address the following questions: 1) How do cultural and behavioural factors interact to shape preferences for CBDC anonymity/privacy? 2) To what extent do behavioural biases moderate cultural constraints? 3) Is there a correlation between such moderation and levels of trust? A survey (Google Forms, 19 questions) was administered to 164 respondents from Eastern Europe, Asia, and Africa. Analysis reveals that regional homogeneity in responses suggests culturally conditioned preferences. However, preferences for anonymity over convenience are significantly influenced by institutional factors beyond culture. Culture does not appear to be a decisive factor in matters of trust. In cases of lower trust in monetary institutions, preferences for convenience outweigh anonymity. The study concludes that successful CBDC design is context-specific and depends on the unique circumstances of individual countries. Central banks must understand consumer preferences within their respective countries to choose an optimal CBDC design. However, excessive focus on "marketing" to consumer preferences may undermine the central bank's role as a policymaker, while choosing the right design is crucial for CBDC's success.

ტრიფინის პარადოქსი ოცდამეერთე საუკუნეში

This article presents a fresh perspective on the Triffin Paradox, a concept introduced by economist Robert Triffin in the mid-20th century that continues to have a significant impact on global financial systems and policies. Despite the passage of time and the evolution of the economy, the fundamental principles of the Triffin Paradox remain relevant in today's financial discussions. The paper provides a thorough analysis of the ongoing relevance of the Triffin Paradox in the modern global economy. It draws upon historical context, theoretical frameworks, and empirical evidence to shed light on how the paradox continues to manifest itself in the current financial landscape. Specifically, it explores how the dominance of the U.S. dollar as the world's primary reserve currency perpetuates structural imbalances and systemic vulnerabilities, echoing the concerns raised by Triffin. Moreover, the paper delves into the implications of the Triffin Paradox for various stakeholders, including policymakers and central banks. It examines the challenges posed by the pursuit of domestic monetary policy objectives in an interconnected world, where the stability of the global financial system relies heavily on the stability of the reserve currency issuer. Additionally, the paper explores potential strategies for mitigating the risks associated with the Triffin Paradox and fostering a more sustainable international monetary order. By integrating insights from economics, finance, and international relations, this paper contributes to a deeper understanding of the Triffin Paradox and its enduring significance in shaping contemporary financial dynamics. It emphasizes the need for policymakers and stakeholders to address the inherent structural tensions in the global monetary system, with the goal of promoting financial stability, economic resilience, and inclusive prosperity worldwide.

Implementasi CSR Perusahaan Kawasan Industri Kimia PT. Chandra Asri Petrochemical.Tbk Di Kecamatan Ciwandan , Kota Cilegon

The emergence of gas through chimneys in Cilegon City, especially in the Ciwandan Area, has driven social, social and monetary transformation. The rapidly growing industry has changed the social and monetary order of an area that has been recognized as an agrarian culture into a modern culture. The existence of large organizations that utilize natural resources in Ciwandan has increased the hopes of the surrounding community for an increase in wages, through the Corporate Social Obligation (CSR) program. Therefore, the examination tries to uncover elements of CSR implementation in the PT. Chandra Asri area. This investigation is driven by interpretation techniques with emotional thinking as a context-oriented examination. Data collection is carried out through hierarchy collection, integrated discussions, and documentation studies. Meanwhile, the sources of the research include pioneers of the city corridor, city and regional government officials, pioneers in the areas around the current area, and CSR implementers of PT. Chandra Asri, The results of the examination show that CSR training has been carried out by PT for some time. Chandra Asri at least when he was still under joint administration with medical staff, especially those related to assistance in the field of government, including health, education, social and activities in the field of government. The desperation of this examination gave rise to problems that occurred at PT. Chandra Asri, will be fully responsible for things that hinder the environmental climate. Because after air pollution by these substances occurs, its occupants experience diseases such as shortness of breath, weakness, stability and disease. The purpose of this study, researchers can understand and know the response of PT. Chandra Asri, to the surrounding community affected by chemicals and gas leaks carried out by PT. Chandra Asri.

Currency Hegemony as a Tool of US Global Dominance

Subject. The formation of new centers of global influence predetermines corresponding changes in the global balance of power. At the same time, the lack of real reforms of the global monetary system allows the United States to continue to set the rules of the game in the global economy, despite its increasing crisis potential. In this regard, there is a need to identify the driving forces capable of producing constructive changes in the global monetary order. Objective. A summary of the practice of using the US dollar to suppress global competition and maintain American superiority in international economic relations. Results. The control of the international monetary sphere by the country — hegemon of the world economy can be traced at all stages of the development of international economic relations (IER). Currently, the hegemonic country’s self-interest from issuing international liquidity, with non-resistance to such a policy on the part of all other IER participants, hinders the development of effective anti-crisis measures and worsens the general condition of the world economy. Scattered attempts to overcome the failures of global currency regulation at the local level (including through the use of digital technologies) seem to be ineffective, since they are not systemic in nature. Conclusions. A qualitative reform of the global monetary system is impossible without combining the efforts of the world’s largest economies to counter the destructive policies of the country that issues key international liquidity. Otherwise, the costs of financial crises become an insurmountable obstacle to the global economy entering a path of sustainable development.

Shaping and Reshaping the Global Monetary Order during the Interwar Period and Beyond: Local Actors in-between the International Institutions ed. by Catherine P. Brégianni and Roser Cussó (review)

Shaping and Reshaping the Global Monetary Order during the Interwar Period and Beyond: Local Actors in-between the International Institutions ed. by Catherine P. Brégianni and Roser Cussó (review)

The Nexus of Public Debt and Private Finance: Forging the International Monetary Order

ABSTRACT The contested alliance of state and finance embodied in public debt forms a nexus that has shaped the emergence of capitalism, and has also strengthened and transformed as capitalism developed. The state’s recourse to debt is the foundation for the emergence of a powerful financier class, but this powerful class of financiers has also come to depend on the state to provide the fodder for its continual growth. This paper investigates the key role of this nexus in constituting the international monetary hierarchy and by ordering relations between advanced capitalist countries and enforcing the financial subordination of the periphery through a comparative-historical analysis of British hegemony in the 19th century and US hegemony in the 20th century.

The Credit Suisse bailout in hindsight: not a bitter pill to swallow, but a case to follow

In March 2023, Credit Suisse (CS) was bailed out based on the implementation of emergency law to the exclusion of all shareholder rights of the involved banks, likely violating basic principles of monetary order. However, this paved the way for a support plan amounting to 209 billion Swiss francs and the implementation of a state-orchestrated emergency merger with UBS. By the end of August 2023, UBS had fully paid back the support plan and reported the biggest-ever quarterly profit for a bank, amounting to 29 billion US dollars. UBS also started to absorb CS’s domestic business, thereby abandoning the branding of an institution with a history of 167 years. Popular accounts claim the plan could be considered a success and that there was no cost because the money was repaid. We critically evaluate the CS bailout, shedding light on key issues such as bailout-induced wealth transfers, the “too-big-to-fail” challenge, the likelihood of bank bailouts, the optimal level of bank equity, the doctrinal separation of solvency and liquidity, and the benefits of ex-ante market-based bank fragility indicators rather than ex-post accounting indicators. We infer a financial economist’s perspective, in which supervision is expanded by ex-ante market-based risk indicators, unweighted capital ratios are increased to adequately reflect large bank risks, and ex-ante paid liquidity options are introduced. Finally, we call for a public debate on the willingness of taxpayers to implicitly finance the too-big-to-fail risk of large banks.

The Renminbis Ascent: Challenges, Opportunities, and Implications for the Global Monetary System

The Renminbis (RMB) journey towards international prominence encapsulates China's economic metamorphosis and the evolving dynamics of the global monetary system. This paper delves into the multifaceted trajectory of the RMB, highlighting the challenges and opportunities it faces in its quest for global acceptance. It provides an in-depth analysis of the implications of the US-China trade war and the global pandemic on the RMBs internationalization. The paper also underscores the transformative potential of strategic initiatives such as China's Belt and Road Initiative (BRI) and the pioneering Digital Yuan. Through a nuanced exploration of these themes, this study offers insights into the RMB's current status and its prospective role in the global monetary order. As countries grapple with changing trade dependencies and the digital revolution in finance, the RMB emerges not just as a participant but as a potential leader in reshaping the contours of international finance.

Was the post-war international trade order bound to succeed while the Bretton Woods monetary order established in 1944 was doomed to fail?

This paper explores the reasons embedded in the original architecture of both the international trade and monetary regimes that determined different outcomes for both. It proposes that the original version of the Bretton Woods monetary regime showed faster its essential failures and basically had to be replaced as early as 1971, while the trade regime embodied in the GATT and later in the WTO managed to at least survive until present day. It posits that correspondence (or the lack of it) of the basic characteristics of the said regimes with the underlying political reality where the regimes would apply (in line with Ruggie´s depiction of «embedded liberalism») accounts for the differentiated outcomes. It explains that the international trade regime showed more flexible traits that allowed it to adjust to the underlying political and led to its survival. The lack of that adaptability element would likewise explain the early demise of the original Bretton woods scheme.

Pozycja prawna Narodowego Banku Polskiego jako strażnika wartości pieniądza w świetle normatywnych uwarunkowań ładu pieniężnego

The article concerns an issue of great significance from the point of view of contemporary challenges. The primary objective is to identify problems and legal instruments which are of fundamental importance in the perspective of the central bank’s tasks concerning the protection of the value of money and the maintenance of a stable price level, as defined in the Act on the National Bank of Poland (the NBP) and in Article 227 (1) of the Polish Constitution. In this context, it is important to understand the problem of the value of money in general and to give due consideration to the legal status of the NBP in the context of building monetary order and the legal possibilities of its operation in this area. Undoubtedly, an important attribute of the NBP is its legally guaranteed independence from all state authorities and the formulation of its basic forms of action within the framework of the legal system. Fundamental to the problem identified in the title of this article is undoubtedly an understanding of the basic legal instruments used by the NBP to protect the value of money. These include in particular: the determination and implementation of monetary policy, the prevention of excessive inflation and the increase in the prices of goods and services, as well as the use of interest rates in the process of stabilizing the value of money and price formation. The question of issuing money, especially when we are dealing with money overprinting, becomes a separate problem. In conclusion, it should be stated that concern for monetary order is an essential element in building the foundations of economic, financial, social and legal order in the state. The work uses primarily the dogmatic method and, to a lesser extent, other methods as well.

Geopolitical Tensions and Global Monetary (Dis)Order

Abstract Two sources of geopolitical tension – G7 sanctions on Russia and conflict between the United States and China – have the potential to reshape the global monetary system. This short paper argues that only the second is likely to have far-reaching, and heavily negative, consequences if allowed to develop further.

UNDER PRESSURE OF DIGITALIZATION AND GEOPOLITICAL CHALLENGES: INTERNATIONALIZATION OF CURRENCIES AND THEIR RESERVE STATUS

Digitalization and geopolitical challenges are increasingly being viewed as preconditions for the transformation of global monetary order towards stronger multipolarity. However, according to traditional approaches, current status quo is more viable because of the technological neutrality of reserve currency status. At the same time, alternative approaches point to technological opportunities for the internationalization of the renminbi, which would heighten the competition between the main currencies and hurt the U.S. dollar. Critical overview of new theoretical approaches indicates that putting retail CBDC at the heart of changes in global monetary order is too categorical. It is likely that digitalization will affect the technology of international transactions and thus enhance competition between leading currencies in how they support payment services for clients. Meanwhile, CBDC design issues and cooperation between central banks in transborder digital payments create new trade-offs that support the more traditional approach on global monetary competition. Recent demand trends of reserve assets also contribute to stronger rigidity of the international currency system.

O capítulo da moeda baseada em reservas de commodities: Friedrich A. Hayek, John Maynard Keynes e a Ordem Monetária Internacional

ABSTRACT The frontal clash in the pages of Economica between Friedrich A. Hayek and John Maynard Keynes in 1931 was unique in scale and influence. Although this event had intense repercussions on the profession as a whole, in 1943 occurred a less discussed episode involving both men. Hayek and Keynes entered into controversy regarding the re-foundations of the international monetary order post-Second World War and the commodity reserve currency proposal. This round was somewhat neglected but is historiographically relevant since it was the only public debate with the active engagement of both sides in a professional journal after 1931. Moreover, it epitomized the personal and intellectual mature relationship of Hayek and Keynes, marked by convergence, dialogue, and friendship. This collaboration was particularly developed when the London School of Economics (LSE) evacuated to Cambridge during the Second World War and Keynes found rooms for Hayek in King’s College, Cambridge.

Cryptocurrency as a Possible Alternative to the De-dollarization of the Global Monetary System

The article analyzes the ongoing changes associated with the financial instability of the current global monetary system. In the course of the study, the prerequisites aimed at changing the world monetary order were considered; an assessment was made of the possible use of cryptocurrency as a new global monetary standard. The concept of supranational currency is formulated. The paper proposes an alternative theoretical solution for the circulation of the world monetary system, based on the simultaneous circulation of several types of world currencies at once, including cryptocurrencies. The purpose of this study was to study and determine the trends of ongoing changes associated with the transformation of the world monetary system, the circulation of cryptocurrency and a decrease in the level of confidence on the part of the world community in the US dollar. As a hypothesis of the study, the judgment is formulated that the improvement of the world monetary system must be carried out through the introduction and development of cryptocurrency as a new independent financial instrument that meets the requirements of modern society, as well as the processes of functioning of international monetary relations. The analysis of the actual problems of the current state and the prospects for the circulation of the current global monetary system made it possible to formulate the factors that influence the increase in the demand for cryptocurrencies among market participants. An assessment of the future of cryptocurrencies was carried out, the prospects for the influence of the existing world monetary system on international financial relations, as well as the further role of cryptocurrencies in it, were considered.

THE UKRAINE WAR IN THE DAWN OF A NEW GLOBAL MONETARY ORDER

The Ukraine War does not just represent the large-scale reactivation of conventional military conflict in Europe. As a major confrontation between great powers whose span encompasses several overlapping arenas, it also involves another clash in the intensifying strategic competition to determine the future architecture of the global financial and monetary order and maybe even a potential watershed that can trigger its rearrangement. Under these conditions, currencies and monetary assets are being targeted, weaponized as vectors of power projection and also harnessed as asymmetric equalizers in the pursuit of victory. In this regard, in order to offer a clear situational awareness of the background, the present article explains the enduring symbiotic connection between money and power and its importance for the practice of statecraft in the domain of high politics. As a meaningful precedent, the following section contends that the Kremlin’s takeover of Crimea unleashed a clash in which both the so-called “collective West” under American leadership and the Russian Federation relied on monetary instruments for both offensive and defensive purposes. Next, the paper scrutinizes how monetary elements are playing a major role in the deepening mutual hostility between Western powers and Russia as a result of Moscow’s invasion of Ukraine. Whereas the Western coalition has implemented various measures in an attempt to sink the monetary components of Russian national power, the Russians are approaching this challenge through counterintuitive strategies as a force multiplier to strengthen the rouble’s position and also as a catalyst that could trigger a chain reaction which accelerates de-dollarization on a global scale.

The International Monetary System Reform: Refusal to Use the Dollar and Fair Exchange Rate

The purpose of the study is to develop recommendations aimed at eliminating shortcomings of the modern international monetary system. The author suggests a draft of its reform. The draft provides, firstly, an objective reflection of the economic state of the issuing state in compliance with the exchange rate of the national currency and, secondly, allows eliminating disproportionate use of the US dollar in international trade. When developing the draft of the reform, the author proceeded from the assumption that the reform of the international monetary system based on consensus is impossible: «beneficiaries of the modern monetary order» will actively defend their national interests to the detriment of the interests of the majority of members of the international community. Under the current conditions, the only way to transform the international monetary system is to take unilateral actions of individual States. At the same time, the «engine of the reform» should include the commercial benefit of private participants of foreign economic activity: it is unrealistic to adjust the international monetary system by establishing new rules that do not ensure additional (at least minimal) profit for international trade agents. Based on these prerequisites, the author formulates a model of unilateral modernization of the settlement system and the system of customs and tariff regulation when importing goods that can be applied by an individual state. Implementation of this model should generate demand on the domestic foreign exchange market for the national currency of the importing state proportional to its share in international trade. A consistent increase in the number of states using this model will allow, based on market principles, creating a new international monetary system, eliminating its main drawbacks, including reducing the role of the US dollar in international trade to an adequate value reflecting the current state of the American economy. The author relied in the study on analytical and statistical methods, the method of economic and legal modeling.

International clearing system as alternative monetary order

The purpose of this paper is to reconstruct the debate on the international clearing mechanism from the pioneering proposals of the nineteenth century to the years of high theory, at the beginning of the 1940s, when several plans were defined to establish international clearing mechanisms, and the well-known John Maynard Keynes’s International Clearing Union Plan was joined by other projects proposed by Paul Einzig and two German-born economists, Ernst Friedrich Schumacher and Hubert Ladenburg. As is well known, the Keynes plan was conceived as a response to the Nazi plan to establish a multilateral clearing system for regulating trade relations in the economic space of the countries occupied by the Third Reich. However, Keynes did not elaborate a plan radically opposed to the Nazi proposal, but shared its essential core. While being opposite sides of the conflict, both Nazi Germany and the British government proposed the same monetary order, based on multilateral clearing system, for the post-war world. The project of a new international monetary order based on the multilateral clearing system was not unanimously shared among the Allies: the United States moved on different lines confirming the centrality of gold in the post-war world order. Economic interests imposed the restoration of gold-exchange standard, based on the dollar supremacy and the Bretton Woods agreement, confirming the political success of Harry Dexter White’s proposal, was a turning point in a spontaneous path towards a new international order based on clearing agreements. Keynes proposed an economically realistic solution, based on the experience of clearing agreements resulting from the collapse of the gold exchange standard, but his plan was politically unrealistic in the face of the interests of the United States superpower. Keynes did not accept a compromise, but was simply defeated.

Globalna dominacija dolara na izmaku?

The paper points out that the relatively slow development of RMB as a reserve currency is taking place in parallel with the expansion of trade invoiced in the renminbi. It is argued that, even in the absence of financial liberalization, the renminbi could still become a global currency. Namely, the leading status in world trade creates the potential for creating demand and supply of renminbi. Additionally, in the same direction is working an increase in the number of central banks with which The People's Bank of China has agreements on swap lines for foreign exchange, as well as the accelerated development of the offshore Yuan market. An important moment will be the expected changes in the Chinese exchange rate regime, since the end of pegging RMB to a basket of currencies and the transition to an inflation-targeting regime could lead to a larger part of Asia following China that is using its currency more intensively. Additionally, although currently exclusively for domestic use, China's central bank's digital currency will eventually facilitate the international use of the renminbi. Consequently, it can be concluded that in the coming decades, the dollar will continue to play a predominant, but not, as it has been, an exclusive role in the international monetary order.

Economic notes: The early years, 1972–1983

AbstractWe set the stage in 1972 when the bank Monte dei Paschi di Siena founded Economic Notes as part of its manifold scheme to reach two main goals: going international and acquiring a stronger position in the public discourse on economics and finance. Then, we highlight how the new Journal aimed at achieving Monte's goals by adopting a specific editorial style. Moreover, through the turmoil of its first dozen years, Economic Notes' bold strategy attracted top international authors and testimonials, selected topical issues, knitted theory and policy, embraced pluralist and forward‐looking views, helped the University of Siena to strengthen its international connections. The Journal quickly became a landmark for domestic, European and global debates owing also to favourable contingencies. A special blessing was that, would be Nobel laureate, Bob Mundell had just settled down in a shabby villa in the outskirts of Siena where he organized the Santa Colomba Meetings. Those informal summer workshops brought a free flow of the most authoritative experts on international money and finance exactly at the time the Bretton Woods monetary order collapsed and stagflation risks emerged. That greatly favoured the editorial success of the Journal throughout the 1970s.

세계화 시대 자본주의 질서와 국가의 변화

This article examines the transformation of the state in the second globalization period since the 1970s. In the market-centered post-Bretton Woods monetary order, one could expect a reinforcement of the capital compared to the state, but the role of the American state has paradoxically been strengthened. Furthermore, the birth of euro has also demonstrated a renewed transnational state function. The global financial order has been dramatically transformed with the financialization of capitalism and the capitalist orientation of the state. The state has been active in the public debt increase, and the growth of institutional investors and sovereign funds, symbolizing a certain functional fusion between state and capital. The state has been instrumental in transforming the citizens into active participants to the global capitalist order. The rise of the Chinese model of state capitalism as well as the anti-globalization movements in the developed world have been serious challenges to these trends. They nevertheless are different from the Communist challenge of the past in the sense that they no longer propose a replacement of global capitalism but rather a limited correction.(Soongsil University)