Discussion paper

DP13453 China vs. U.S.: IMS Meets IPS

Currently both the International Monetary System (IMS) and the International Price Systems (IPS) are dominated by the U.S. The emergence of China, both as reserve currency and as a currency of invoicing, is likely to disrupt this status quo. We provide a framework to understand the forces that will shape this transition and identify sources of instability. We highlight the risk of an abrupt shift triggered by a run on the dollar.


Maggiori, M and E Farhi (2019), ‘DP13453 China vs. U.S.: IMS Meets IPS‘, CEPR Discussion Paper No. 13453. CEPR Press, Paris & London. https://cepr.org/publications/dp13453