The Global Currency Area a Way to Constructively End the Era of Reserve Currency

Mieczysław Dobija

Faculty of Management, Cracow University of Economics, Cracow, Poland.

DOI: 10.4236/me.2014.54029                

Abstract

An integrative currency area that is able to unify countries with different levels of labor productivity leads to a global currency area with only one currency. In such a scenario, the reserve money system would obviously disappear. This concept, linked with the correct view that money is a receivable for labor done, offers a new vision of globalization. This paper considers the necessary fundamentals of a global currency area and a post-exchange rate world economy. The study explores a new financial framework as well as the significance of the labor productivity ratio in macroeconomic control.

Keywords

Integrative Currency Area, Global Currency Area, Reserve Money System, Self-Financing, The Equation of Exchange, Labor Productivity Index

Conflicts of Interest

The authors declare no conflicts of interest.

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