This paper will address various issues. It first takes up the reasons why national currencies might be used internationally, and provides some data on the international role of currencies today, and on their recent evolution. It then takes up the factors suggesting that the euro will emerge as an international currency, possibly displacing the dollar. I then offer reasons for believing that major displacement of the dollar will not take place, at least for several decades. Next it addresses what the consequences might be if that forecast proves to be incorrect. A concluding section touches on probably more important issues that are not discussed in detail in the paper.
Working Paper 98–03, Weatherhead Center for International Affairs, Harvard University, 1998.