ABSTRACT
There are two broad approaches to international monetary reform which would result in the complete elimination of the dollar's reserve currency role. The first would eliminate the need for any international reserves by assuring rapid adjustment through the adoption of freely flexible exchange rates or a "return" to the automatic rules of the "gold standard." The second approach would eliminate only the use of the dollar as a reserve asset, substituting gold, or some new national currency for both the dollar balances outstanding and for any future buildup which might otherwise occur. For the liquidity aspect of the "gold standard" approach, we shall assume a corollary agreement to avoid future buildups of reserve dollars to make clear that this option really would eliminate the dollar as a reserve currency, at least at the margin. The United States would, of course, strongly prefer to avoid any amortization of the consolidated dollars.
