1887

UN Department of Economic and Social Affairs (DESA) Working Papers

The UN Department of Economic and Social Affairs (DESA) Working Papers aim to stimulate discussion and critical comment on the broad range of economic, social and environmental issues associated with the United Nations Development Agenda.

English

Building a Stable and Equitable Global Monetary System

This paper argues that SDRs should become a more relevant instrument of international monetary cooperation. This requires transforming them into a pure reserve asset and the IMF into a fully SDR-funded institution. SDRs would then be issued counter-cyclically and treated as deposits of countries in the IMF, which can in turn lend to countries. This approach would correct basic deficiencies of the current global monetary system. Complementary reforms include a substitution account for an orderly and smooth transition from major reserve currencies to SDRs, and the issuance of SDR-denominated bonds as an alternative to other major short-term assets.

English

Keywords: international monetary system, innovative development finance, governance of the IMF, Special drawing rights
JEL: F55: International Economics / International Relations, National Security, and International Political Economy / International Institutional Arrangements; E52: Macroeconomics and Monetary Economics / Monetary Policy, Central Banking, and the Supply of Money and Credit / Monetary Policy; F33: International Economics / International Finance / International Monetary Arrangements and Institutions; H87: Public Economics / Miscellaneous Issues / International Fiscal Issues; International Public Goods
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