The Rise of the Dollar and Fall of the Euro as International Currencies

International currencies play important roles as foreign exchange reserves but are also most frequently used to denominate corporate and government bonds, bank loans, and import and export invoices. These currencies offer unrivaled liquidity, constituting large shares of the volume on global foreign...

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Bibliographic Details
Published in:AEA papers and proceedings 2019-05, Vol.109, p.521-526
Main Authors: Maggiori, Matteo, Neiman, Brent, Schreger, Jesse
Format: Article
Language:English
Subjects:
ECONOMIC CONSEQUENCES OF DOMINANT CURRENCIES
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Summary:International currencies play important roles as foreign exchange reserves but are also most frequently used to denominate corporate and government bonds, bank loans, and import and export invoices. These currencies offer unrivaled liquidity, constituting large shares of the volume on global foreign exchange markets, and are commonly chosen as the anchors targeted by countries with pegged or managed exchange rate regimes. We provide evidence suggesting a recent rise in the use of the dollar, and fall of the use of the euro, with similar patterns manifesting across all these aspects of international currency use.
ISSN:2574-0768
2574-0776
DOI:10.1257/pandp.20191007