Open Access
Article
SciPap-1374
Currency Competition: Currency Internationalization Potential Assessment Using Fuzzy Logic Approach
1 Faculty of Management and Economics, Department of Management and Marketing, Tomas Bata University in Zlín, Mostní 5139, Zlín 760 01, Czechia
2 Faculty of Management and Economics, Department of Management and Marketing, Tomas Bata University in Zlín, Mostní 5139, Zlín 760 01, Czechia
3 Institute of Economic Research SAS, Slovak Academy of Sciences, Šancová 56, Bratislava 81105, Slovakia
* Authors to whom correspondence should be addressed.
Abstract: Frequently noted inadequately explored connections between currency internationalization and expected change in the polarity of the international monetary system in the international relations literature are commanding the renewed attention and vigorous debate for more international monetary arena studies. This paper examines the potential of competing currencies to internationalize. For the first time, we utilize a fuzzy logic-based multi-dimensional model assessing separately the internationalization potential of 14 competing currencies in 2020 to predict whether the international monetary system is likely to remain unipolar and US dollar based, or evolve into a multipolar international monetary arena. The results suggest comparable levels of currency internationalization exist, indicating that the international monetary system may be further shaped into a more competitive (multipolar) monetary environment, controlling for economic, convertibility, monetary stability, political and legal factors. Finally, our results have policy implications since determined currency internationalization potential levels may facilitate economists and policymakers better understanding which currencies may play an increasingly large role in becoming a dominant international currency in the international monetary system.
Keywords: Fuzzy Logic, Competition, International Monetary System, Currency Internationalization, Multi-Polarity
JEL classification: F31 - Foreign Exchange, F33 - International Monetary Arrangements and Institutions, F63 - Economic Development
Received: 7 September 2021 / Revised: 15 November 2021 / Accepted: 16 November 2021 / Published: 28 November 2021
