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Ben Bernanke writes:
"If your elementary school was like mine, when you did a good job on your homework you got it back with a gold star pasted on top. The gold star was not valuable itself—you couldn’t deposit it in the bank—but it recognized your good efforts and, maybe, motivated you to work hard on the next assignment.
China received the equivalent of a gold star this week, when the International Monetary Fund agreed to include the Chinese currency, the renminbi, as part of an IMF-managed asset called the Special Drawing Right, or SDR. Like the awarding of a gold star, inclusion in the SDR is almost entirely symbolic. SDRs, which are defined by the IMF as a fixed combination of the dollar, the euro, the British pound, the yen, and now the renminbi, were created in 1969 to provide an alternative medium for governments and central banks to hold international reserves. However, in practice they are not much used, except for internal accounting within the IMF, and the renminbi’s inclusion in the SDR confers no meaningful additional powers or privileges on China."
For the full article:
http://www.brookings.edu/blogs/ben-bernanke/posts/2015/12/01-chinas-gold-star?
