Title:“Borrowing Money or Printing Money?”----Dollar Liquidity and Proof of Triffin Dilemma
Read
DownLoad |
| Title | Title:“Borrowing Money or Printing Money?”----Dollar Liquidity and Proof of Triffin Dilemma
|
| Author | Yao Yudong and Tang Xinyu |
| Organization | Monetary Policy Department and Monetary Policy Department II, the People’s Bank of China，Beijing 100800 |
| Email | yyudong@pbc.gov.cn,txinyu@pbc.gov.cn |
| Key Words | International Liqiduity, Polak Model, Triffin Dilemma |
| Abstract | Facing long-term current account deficit, United States rely heavily on its capital account surplus to "borrow money" and BOP gap to "print money". This paper, by providing a Polak-type (1957) model of overseas dollar-liquidity-providing by U.S. BOP gap and foreign exchange reserve receiving countries’ overall-liquidity-providing by U.S. capital account financing, indicating that U.S. domestic economic situation and macroeconomic policies not only dominate the overseas dollar liquidity supply, but also dominate the domestic liquidity of foreign exchange reserve receiving countries. U.S internal monetary policy has strong externalities or spillover effects, and in fact become the world's central banks. This article also gives a theoretical proof of "Triffin Dilemma". |
| Serial Number | WP260 |
| Time | 2012-06-12 |
|