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?
[A]Leontief paradox
[B]Triffin dilemma
[C]Gibson’s paradox
[D]Ellsberg paradox


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.

Originally written on February 13, 2012 and last modified on December 20, 2014.

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