A single global currency?
Some people believe that trade and travel would be easier with a single, global currency. It may seem a superficially attractive idea but on closer examination it seems extremely naïve.
First, what are the attractions? Well, obviously travelers would not have to queue to exchange their own currency for that of the country they are travelling to. In addition, international trading would be easier, more stable and more predictable, which would be attractive, in many ways, to the world’s stock exchanges. Many countries find it harder to export when their own currency is much stronger than thecurrencies of those nations they wish to export to. Finally, of course, there
is the view that a single currency would promote international harmony and
cooperation.
is the view that a single currency would promote international harmony and
cooperation.
How real are these touted gains? Travel would certainly be easier without doubt but how much easier? We can at present take $US to almost any country in the world. International trade might be simplified but there would also be many drawbacks. If a country is in economic
difficulties, one way out is to alter its exchange rates; this would not be possible with a single currency. Above all, the idea that rich and poor countries can share the same currency is basically impractical. We need only to look at the present (2011-12) euro crisis to see that even the relatively affluent countries of the eurozone are struggling to share the same currency.
Overall, the idea of a single global currency seems driven by the same utopian vision of world harmony that inspired the creation of a so-called international language, Esperanto, about a century ago. That didn’t work. Neither would a single global currency.
difficulties, one way out is to alter its exchange rates; this would not be possible with a single currency. Above all, the idea that rich and poor countries can share the same currency is basically impractical. We need only to look at the present (2011-12) euro crisis to see that even the relatively affluent countries of the eurozone are struggling to share the same currency.
Overall, the idea of a single global currency seems driven by the same utopian vision of world harmony that inspired the creation of a so-called international language, Esperanto, about a century ago. That didn’t work. Neither would a single global currency.
275 words
No comments:
Post a Comment