from International Institutions and Global Governance Program and Greenberg Center for Geoeconomic Studies

The Future of International Liquidity and the Role of China

October 31, 2011

Report

More on:

China

Monetary Policy

Capital Flows

Overview

Financial crises in the 1930s and 1970s showed the world that economic instability results when demand for international liquidity allows a small number of countries to run up massive debts in their own currencies. Named for the economist who first described the scenario in the 1960s, this “Triffin Paradox” threatens the global financial system again today as demand for reserves has skyrocketed among emerging market economies. In this Center for Geoeconomic Studies Working Paper, produced in association with CFR’s International Institutions and Global Governance program, Professor Alan Taylor considers whether China might play a larger role in stabilizing the world economy by supplying a reserve asset of its own—an internationalized renminbi.

More on:

China

Monetary Policy

Capital Flows

Top Stories on CFR

Saudi Arabia

Saudi Arabia

Relations between the two countries, long bound by common interests in oil and security, have strained over what some analysts see as a more assertive Saudi foreign policy.

Cybersecurity

China is once again conducting cyber-enabled theft of U.S. intellectual property to advance its technological capabilities. A new Council on Foreign Relations brief provides recommendations to combat this new old threat.