International currency dominance boosts welfare, increases purchasing power for residents globally.
The article explores the benefits of a country's currency being used internationally. By creating a new model, the researchers found that having a currency used globally can increase the purchasing power of residents in that country. The study shows that the Euro area could gain between 1.9% to 2.3% in welfare from the international use of the euro. It also reveals that countries prefer the dominant international currency to have the lowest inflation rate.