Do you think that the World should have ONE Central Bank with a Single Currency for...

Do you think that the World should have ONE Central Bank with a Single Currency for promoting financial flows, trade, investment and economic growth? Explain and justify your answer.

Expert Solution

Yes, I do think that the world should have one Central Bank and there should be single currency in place. Having such a system in place would ensure that there is only one centralized financial system for the world. Financial system consists of financial markets, instruments as well as institutions.

The design of a financial system has a direct impact on economic growth. Having a centralized and single financial system across the world will facilitate mobility of capital from one economy to another. Also with one centralized financial structure allocation of capital will be optimum and higher share of resources will be allocated to fast growing sectors in different economies.

Secondly a single centralized financial system will lead to price stability in the long run. Financial markets will witness smooth functioning and integration of financial markets. This will help in developing a medium term and long term price stability orientation and will also help in reducing high inflation uncertainty and minimizing the adverse impact of inflation.

Thus, in my opinion, the world should have one Central Bank and a single currency and such a system will promote financial flows, trade, investment and economic growth.

jeff jeffy answered 2 years ago

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