Global economic crisis and monetary system adjustment: empirical evidence and theoretical framework

ZHANG Guangbin1 HUANG Haizhou2 ZHANG Shaozong1

(1.Yunnan Normal University)
(2.China International Capital Corporation Limited )

【Abstract】The world economy is yet to step out of the fallouts of the global financial crisis ten years after its eruption in 2008. Historically, every global economic crisis occurred in a critical period of the global monetary system restructuring. Moreover, failure of the global monetary system to get adjusted in accordance with changing times was an important factor behind the outbreak of the global economic crisis, which has prompted us to explore the relationship between global monetary system adjustment and global economic crisis. Theoretically, the premise that a single sovereign currency acts as an international standard currency is that the private attribute of its currency issuance can support its public attribute as an international standard currency and whether the premise holds depends on the size of the economy of the sovereign state. However, the reality is that with the convergence of external economic growth, the United States has had a declining share in the global economy, which leads to the cyclical breakdown of the theoretical tension that sustains the global monetary system. The result is the cyclical outbreak of global economic crisis.

【Keywords】 global economic crisis; global currency system; international standard currency;


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This Article


CN: 11-2201/X

Vol 35, No. 09, Pages 2664-2669

September 2015


Article Outline


  • 1 Functioning dilemma of global monetary system around the Great Depression
  • 2 Great Stagflation: immediate consequence of global monetary system adjustment
  • 3 The 2008 global financial crisis: repetition of the old tale
  • 4 A simplified theoretical derivation
  • 5 Conclusions
  • Footnote