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Global distribution of international currencies and RMB internationalization
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TitleGlobal distribution of international currencies and RMB internationalization  
AuthorHe Qing,Wang Fang,Guo Junjie and Zhuang Tailiang  
OrganizationRENMIN UNIVERSITY;The Chinese Universtiy of Hong Kong; 
Key WordsCurrency Internationalization; Distribution of International Currency; Gravity Model 
AbstractThis paper analyzes the factors that contribute to the geographical distribution of international currency based on the gravity model by examining a panel data of currency trading from 1995 to 2013. We show that the trade and capital flows between the source and destination country, the economic size and legal system of the destination country, and whether the two countries use a common language play very important roles. However, distance might impose a negative but insignificant effect. Furthermore, the distribution of the international currencies is disproportional in that they tend to be more concentrated on major financial centers. Based on the empirical studies, we simulate the theoretical global distribution of RMB, which is illuminating for policy decisions. 
Serial NumberWP659 
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