Dailami, MansoorMasson, Paul2012-03-192012-03-192009-12-01https://hdl.handle.net/10986/4340Backed by rapid economic growth, growing financial clout, and a newfound sense of assertiveness in recent years, the BRIC countries - Brazil, Russia, India, and China - are a driving force behind an incipient transformation of the world economy away from a US-dominated system toward a multipolar one in which developing countries will have a major say. It is, however, in the international monetary arena that the notion of multipolarity - more than two dominant poles - commands renewed attention and vigorous debate. For much of its history, the quintessential structural feature of the international monetary system has been unipolarity - as American hegemony of initiatives and power as well as its capacity to promote a market-based, liberal order came to define and shape international monetary relations. As other currencies become potential substitutes for the US dollar in international reserves and in cross-border claims, exchange rate volatility may become more severe. There are also risks that the rivalry among the three economic blocs may spill over into something more if not kept in check by a strong global governance structure. While the transition will be difficult and drawn out, governments should take immediate steps to prevent financial volatility by enhancing cooperation on monetary policies, currency market intervention and financial regulation.CC BY 3.0 IGOANCHOR COUNTRYASSET CLASSASSET PRICEBALANCE OF PAYMENTSBALANCE OF PAYMENTS DEFICITSBASKET OF CURRENCIESBENEFICIARIESBILATERAL TRADEBLUE CHIPBONDSCAPITAL ACCOUNTCAPITAL CONTROLSCENTRAL BANKCENTRAL BANKSCOMMODITIESCOMMODITYCOMMODITY EXPORTSCOMMODITY PRICESCOMPETITIVE ADVANTAGECREDIBILITYCREDIBILITY PROBLEMSCREDIT EXPANSIONCURRENCYCURRENCY CONVERTIBILITYCURRENCY DEPRECIATIONCURRENCY HEDGINGCURRENCY MARKETCURRENCY MARKETSCURRENCY SWAPCURRENT ACCOUNTCURRENT ACCOUNT DEFICITSCURRENT ACCOUNT POSITIONCURRENT ACCOUNT SURPLUSDEBT CRISISDEBT ISSUANCEDEBTSDEPRESSIONDEVALUATIONDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT ECONOMICSDISINFLATIONDOLLAR PEGDOMESTIC INFLATIONDOMESTIC MACROECONOMIC POLICIESEARNINGSECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC DOWNTURNECONOMIC GROWTHECONOMIC ORDERECONOMIC OUTCOMESECONOMIC POWERECONOMIC REFORMECONOMIC REFORMSEMERGING MARKETEMERGING MARKET COUNTRIESEMERGING MARKET DEBTEMERGING MARKET ECONOMIESEMERGING MARKETSEUROEURODOLLAR MARKETSEXCHANGE RATEEXCHANGE RATE FLEXIBILITYEXCHANGE RATE VOLATILITYEXCHANGE-RATEEXPENDITUREEXPORTEREXPOSURESFEDERAL RESERVEFINANCIAL ASSETSFINANCIAL CRISESFINANCIAL CRISISFINANCIAL INFRASTRUCTUREFINANCIAL INSTABILITYFINANCIAL INSTITUTIONSFINANCIAL MARKETFINANCIAL MARKETSFINANCIAL STABILITYFINANCIAL VOLATILITYFISCAL DEFICITSFLEXIBLE EXCHANGE RATESFLOATING EXCHANGE RATEFLOATING EXCHANGE RATESFOREIGN ASSETFOREIGN ASSET HOLDINGSFOREIGN ASSETSFOREIGN DIRECT INVESTMENTFOREIGN ECONOMIC POLICYFOREIGN ECONOMIC RELATIONSFOREIGN EXCHANGEFOREIGN EXCHANGE MARKETSFOREIGN EXCHANGE RESERVESFREELY FLOATING EXCHANGE RATEGDPGDP PER CAPITAGLOBAL ECONOMYGLOBAL FINANCEGLOBAL FINANCIAL STABILITYGLOBAL IMBALANCESGLOBAL LIQUIDITYGLOBALIZATIONGOLDHARMONIZATIONINFLATIONINFLATION TARGETINGINFORMATION SHARINGINSURANCEINSURANCE COMPANIESINTEREST RATESINTERNATIONAL BANKINTERNATIONAL COOPERATIONINTERNATIONAL CURRENCYINTERNATIONAL DEBTINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCEINTERNATIONAL FINANCIAL ARCHITECTUREINTERNATIONAL FINANCIAL INSTITUTIONSINTERNATIONAL INVESTMENTINTERNATIONAL MONETARY REFORMINTERNATIONAL MONETARY RELATIONSINTERNATIONAL MONETARY SYSTEMINTERNATIONAL RESERVEINTERNATIONAL RESERVESINTERNATIONAL SETTLEMENTSINTERNATIONAL TRADEINVESTMENT FLOWSINVESTMENT INCOMEJAPANESE YENLOANLOAN AUTHORIZATIONSMACROECONOMIC POLICIESMACROECONOMIC POLICYMAJOR CURRENCYMARKET POWERMARKET PRACTITIONERSMARKET VOLATILITYMATURITYMONETARY CONDITIONSMONETARY COOPERATIONMONETARY FUNDMONETARY INDEPENDENCEMONETARY INTEGRATIONMONETARY POLICIESMONETARY POLICYMONETARY REFORMMONOPOLYMULTIPLE CURRENCIESNATIONAL CURRENCIESNATURAL RESOURCEOIL EXPORTERSOIL EXPORTING COUNTRIESOTHER CURRENCIESOUTPUTOVERVALUATIONPENSIONPENSION FUNDSPETRODOLLARSPOLITICAL POWERPOOLINGPORTFOLIOPORTFOLIO DIVERSIFICATIONPOSITIVE ECONOMICSPRIVATE INVESTMENTPRIVATE INVESTORSPRUDENTIAL REGULATIONPUBLIC CONFIDENCERAPID ECONOMIC GROWTHRECESSIONREGIONAL INTEGRATIONREGULATORREPUTATIONRESERVE CURRENCIESRESERVE CURRENCYSET OF CURRENCIESSOVEREIGNTYSPECIAL DRAWING RIGHTSSTABLE EXCHANGE RATESSTOCK MARKETSTOCK MARKET CAPITALIZATIONSUBSTITUTION ACCOUNTSUPPLY SHOCKSURPLUSESSWAP ARRANGEMENTSTAXATIONTOTAL EXPORTSTRADE ACCOUNTTRADE BARRIERSTRADE DEFICITTRADE EXPANSIONTRADE SURPLUSTRADINGTRADING SYSTEMTRANSACTIONTRANSACTION COSTSTREATIESUNDERVALUATIONUPWARD PRESSUREWEALTHWORLD ECONOMYWORLD STOCK MARKETWORLD TRADEWORLD TRADE ORGANIZATIONWorld Bank10.1596/1813-9450-5147