The Future of the U.S. Dollar and its Competition with the Euro

Alex Kondonassis, A.G. Malliaris, Chris Paraskevopoulos
European Research Studies Journal, Volume X, Issue 1-2, 97-110, 2007
EOI: 10.11214/thalassinos.10.01.006

Abstract:

Since the collapse of the Bretton Woods Global International System in 1971, the world economy has experienced significant currency volatility. The major economies of the world have addressed such volatility differently. The EU has chosen to follow a monetary union and introduced successfully a new currency. The U.S. has paid less attention to the fluctuations of the dollar and has pursued an independent monetary policy to promote national economic stability. Japan has seen its currency appreciate significantly. This paper argues that while trade and growth across the globe are doing well, financial developments are intensifying the competition between the U.S. dollar and the euro. Three possible future scenarios are developed and discussed.


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