IAS Economy Practice Question . 12
In context with the International Currencies and Reforms the International Monetary System, it has been quoted by a leading economist that – if a national currency also serves as an international reserve currency, there could be conflicts of interest between short-term domestic and long-term international economic objectives, leading to tension between national monetary policy and global monetary policy. What name has been given to this theory?
Answer: Triffin dilemma
Please search for Triffin dilemma on the web, it was also used by the governor of the People’s Bank of China last year.
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