Ideas and facts of the world monetary order: on a Clearing Integrated Monetary Area in Argentina and Brazil

Abstract

The world monetary order established in Bretton Woods in 1944 is based on the use of few reserve currencies, mostly US dollars and euros, in international payments. A number of alternative plans of reform exist though and, more and more insistently, there is a call for the creation of a common currency to be used in international payments. This article (i) carries out a revision of 20th century reform plans, (ii) analyses the workings of the current international payment system, highlighting the monetary disorders generated by it and comparing it to national payment systems, (iii) proposes the accounting mechanisms within a Clearing Integrated Monetary Area (CIMA) in Argentina and Brazil, rooted in the use of a common currency in a multilateral clearing system and, (iv) proposes final observations on the state of affairs of Europe’s monetary integration.