Euro to Overtake the Dollar?

Two American academics have published a study suggesting that the euro may replace the dollar as the world’s largest reserve currency within ten to fifteen years.

Listen to it all from the BBC.


Posted in * Economics, Politics, Economy

7 comments on “Euro to Overtake the Dollar?

  1. William P. Sulik says:

    It has been implicitly acknowledged this would happen when the Euro was released in the higher €500 denomination.

    See, for example, [url=]this[/url] testimony from 1998:

    If the U.S. wants to preserve it’s lead, it could mint $500, $1,000, and even $5,000 notes and market to the black market sector.

  2. Ed the Roman says:

    It could only happen when the Eurozone has enough dynamism to match the US economy for a long time. That doesn’t seem to be on offer.

  3. Irenaeus says:

    At the rate we’re going, it won’t take 10 years.
    _ _ _ _ _ _ _ _

    Ed [#2]: Money is a store of value and a means of exchange. It depends on trust. In the long run, the issuing government’s steadiness, financial reliability, and monetary-policy competence probably carry more weight with major users of money than economic dynamism marred by gross financial irresponsibility and policies driven by short-term political expediency.

  4. Nikolaus says:

    Yes, and in the 70’s and 80’s it was the Yen, wasn’t it? I don’t deny that the current circumstances support this opinion but I’m not yet convinced that the “United States of Europe” warrents this kind of optimism (or pessimism, depending on perspective).

  5. Andrew717 says:

    To a large extent it depends on how long the Germans at the ECB can fend off the rest of the Europeans, who historicaly have favored inflationary policies. Stable currency is the civic religion of Germany, that’s why folks took to the streets over scraping the D-Mark, but that is not the case is most of the other members.

  6. Harvey says:

    The person who wrote this article apparently has not read todays (03-27-08) financial page in major newspapers. Europe is having some trouble with their Euro’s.

  7. Irenaeus says:

    Andrew [#5]: Good point about the Germans and the European Central Bank. The European Monetary Union was built on an implicit agreement that the euro would be the German mark in new guise. So far that’s been true. But the pressures of expediency may some day get the better of the ECB.