Analysis Of The Current International Monetary System

After reading through literatures from both home and abroad, it is discovered that researches concerning the International Monetary System (IMS) emphasize certainly on comparison and analysis of it based on reviewing the history. Such studies are often at a lower level of abstraction to analyze the real world, at the expense of mathematical precision and logic tight. The analysis of the international monetary economy is lack of precise mathematical expression. Technical limitations did not establish a rigorous logical basis for the contemporary international monetary analysis, while the strictly logical basis of scientific knowledge is a prerequisite for sustainable and orderly growth. This paper begins with the generalization of the evolution of the International Monetary System, and then, under the existing single-dollar-dominated International Monetary System (CIMS), in the way of step-up hierarchy, makes thorough demonstration and research of problems such as the relationship between currencies, the problem of the exchange rate arrangement, the adjustment mechanism of balance of payment, the international reserve currency diversification, the problem of excess liquidity and the trend of evolution of them, as well as the RMB internationalization in turn. "Hegemony" and " benefit" is a logical train of thought the main line of this article. Changes in the history of the international monetary system are the rise and fall of the history of the world's hegemonic. The role of hegemonic influence is not limited to the operation of the international monetary system, but also to a certain extent determines the establishment and evolution of monetary system. "Benefit" is the intrinsic motivation for supremacy. To talk about economic behavior is meaningless without benefit. The International Monetary diversified pattern is the results of decline of the U.S. dollar hegemony and the results of the action to pursue their own interests to maximize. In this paper, the analysis of historical data and the expansion of two-country model McKinnon study demonstrated that under the premise of the absence of currency to replace the dollar, that individual countries pursue their own interests to maximize the result is the reason of the rapid expansion of international liquidity. Having lost the gold binding, fiat money dominates the international monetary system. Excessive expansion of liquidity is unprecedented problems. Ability to effectively solve the problem is clearly of great importance.An extensive literature shows that sub-prime crisis triggered by the global financial crisis is the deep-seated reasons for the excessive expansion of international liquidity. Meanwhile, the sub-prime crisis reflects a crisis of confidence in dollar assets. The gradual decline of U.S. dollar hegemony is an indisputable fact. The world needs a way to completely replace the currencies against the U.S. dollar, so they could constitute a bipolar international monetary system, through the mutual competition and constraints to make the monetary system to achieve a stable equilibrium, and could satisfy the requirements of international liquidity, while not create a confidence crisis at the same time. Compared to the gold standard and the creation of super restore the sovereignty of the international monetary terms, the International Monetary oligarchs is more realistic.The whole paper can be concretely summarized as follows:1. The review of the evolution of the CIMS. This paper first makes a general review of the problems of the IMS such as the classical gold standard system, gold exchange standard system, Bretton Woods system, and then Summed up the reasons for their collapse. This work will make a both theoretical and practical plane for latter theoretical study and contrastive argumentation.2. The inherent defect analysis of the current international monetary system. As the currency of a country's credit, the U.S. dollar played in many areas of international monetary-based functions. This has led to many inherent shortcomings of the current system, and the over-expansion of international mobility is a concentrated expression of many of the ills. Because of the inherent lack of effective international monetary control mechanism, the diversified pattern accelerated this expansion.3. McKinnon's two-country model and its extensions. This section is the theoretical and modeling studies of the foregoing analysis. Through the extensions of McKinnon's two-country model, this chapter tries to make a theoretical proof to the over-expansion of the international monetary supply, and work on to make more abstract researches to the current inter__donal monetary issues.4. The vision on future development of the international monetary system. Among major countries in the world to maximize the interests of perspective, this chapter summarizes the reasons why mature and stable international monetary system is difficult to establish, and then planning the future development of the international monetary system. The article suggests a pairs of oligopoly mechanism, and application of game theory to prove that the international monetary supply can be maintained long-term stability under the mechanism. This pairs of oligopoly mechanism is a more desirable goal of the existing international monetary system, and the RMB should be the international currency oligarch.