What Pro’s and Con’s do you envision coming from one Global Central Bank (list and discuss)?
Given your reasoning should there be one Global Central Bank?
There have been several instances throughout history where people have tried to establish a
global government. Having one global central bank seems economically efficient as it has
several advantages. First of all, it will save a significant amount of money as the foreign
exchange reserves would be abandoned. Secondly, having a global central bank will eliminate
the barrier of different currencies and will help increase international transactions immensely
with the removal of transaction costs. Thirdly, a global central bank will also completely
eradicate the need for currency manipulation and countries would no more use unfair methods of
artificially undervalue their currencies for gaining a competitive advantage with exports (Moore,
2004). However, the concept of one Global Central Bank seems far off despite the ongoing
globalization. This is because having one global central bank has several social and political
disadvantages even if it is seen to be advantageous economically. One majorly significant
disadvantage is that the countries will lose the flexibility in their monetary policy as a country
will not be able to independently influence economic activity, interest rates and exchange rates
without demanding changes on a global scale. Moreover, since a global central bank will operate
with a single currency, this will also cause the weak economies pulling down the other more
developed economies. If one country is faced with a crisis, it has a chance to spreading to other
countries if the other countries do not spend their resources to stabilize the situation. This will
