Global Economy: New Risks and Leadership Problems
Round 1
Reviewer 1 Report
In my opinion, paper hypothesis, purpose and main aim must be emphasized in the abstract. Authors should further analyze the reason for choosing the macroindicators. The authors propose to cancel the leadership of one country, and they recommend a slow transition to the use of SDR (with a basket from 15–20) as a reserve. What currencies should create a basic basket for SDR in practice and what proportion? Which method authors recommend for choosing these currencies. What are the advantages and disadvantages of a larger basket of currencies over the current 5 currencies? (These facts should be emphasized in the paper). All sources must be used in text and vice versa.Author Response
Response to Reviewer 1 Comments
"In my opinion, paper hypothesis, purpose and main aim must be
emphasized in the abstract”
Response: The requirement for Abstract on a limit of words have not allowed us to describe a hypothesis, purpose and aims. So, we were focused on the basic results of research. The purposes and aims are formulated in manuscript Lines 53-61.
“Authors should further analyze the reason for choosing the macroindicators”.
Response: In section «3.4. The leader for the World economy in 21st Century» is carried out the comparative analysis of major candidates on leadership in world economy of 21 centuries. Analysis of the U.S. and China (Tables 1 both 2 See and comments to them Lines 335-516) has been made on the major, key macroeconomic indicators (we note about it in Lines 340-341), which reflect a level of development of national economy and its condition. In particular, the size of GDP, the contribution of different sectors of economy to its manufacture, labour markets, money, a rate of inflation, trading balance, the taxation, and etc. These indicators characterize productive forces of the country and production relations (manufacture, exchange, distribution, consumption). These indicators are a subject of the analysis of analysts of IMF, WB, the monetary authorities, enter into international and national statistics. They allow to define Ranking of the countries.
The analysis of leadership problems was not limited only comparison between USA and China. In subsection “Other candidates for a role of the leader of the World economy” (lines 517-584) has been carried out the comparative analysis of the big group of the countries for a role of solo leader on four criteria: (1) size of the economy (GDP), (2) quality of life (GDP/per capita, Quality of Life Index, Purchasing Power, Index Security, Index Health Care, Cost of Living, Real Estate Price per Income, Time in Traffic, Jam Pollution Index, Climate Index), (3) global competitiveness (productivity, global innovation index) and (4) currency (weight, SDR basket, share in global payment, volatility).
It is our choice of criteria. But also in this case these indicators are the standard for analysis of economy by international economic institutes IMF, WB, BIS, the governments and the Central Banks. We have noted this aspect in article (lines 540-541).
“The authors propose to cancel the leadership of one country, and they recommend a slow transition to the use of SDR (with a basket from 15–20) as a reserve. What currencies should create a basic basket for SDR in practice and what proportion? Which method authors recommend for choosing these currencies. What are the advantages and disadvantages of a larger basket of currencies over the current 5 currencies? (These facts should be emphasized in the paper)”.
REsponse: The question is very important and difficult. The system of reserve currencies has developed and changed within 70 years. These currencies led by USD are reserve, because they stable, with small volatility. That finally reflects stability of economy. USD, Euro, JPY, GBP and CHF are the basic currencies of payments, deals, international liquidity of the Central Banks, loans, issues, FDI and FPI flows. We summarized it in short form in the paper (lines 556-565). Our conclusions lean on a share of currencies in international payments through Swift, stability of currencies on BIS REER, shares of USD in the international liquidity at International Financial Statistics by IMF.
Our conclusion about slow leaving to SDR as to reserve currency with a basket from 15-20 currencies of countries G20 (lines 26-28, 556-565, 700-702) is based on following facts: the Central Banks gradually reduce of USD share in their reserves (now in average 60 %); after global crisis there was a tendency to reduce the international investments to U.S. debts ; the share of payments and funding in not reserve currencies increases; the trust of the markets to USD falls because of three long-term deficiencies of the American economy - a state debt, the balance of payments, trading balance; investors leave in gold; the Chinese economy became the leader in the World economy and trade with good prospect for 21 centuries.
The choice of currencies G20 is not casual. These countries make 90% of world GDP. Deals in these currencies accrue and will accrue. It will be visible in the statistics of international trade turnover of on whom basket SDR is formed. We have underlined the thesis about slow transition to a basket from 15-20 currencies of G20. This process will be long, will take many ten years. It is obvious that period of USD as reserve currency which has fairly begun after Second World War comes to an end. Occurrence of Eurodollars was as the natural result. USD was really reserve currency for the World economy, currency of the biggest and stable economy. But after global crisis the situation changes, risks of deals in one currency were increased.
The markets will define a choice of currency for transactions and deals. But as reserve it is more reliable to use SDR which basket will extend. Already in 2016 in it was included CHY from share of 10.92%. In spite of the fact that the Yuan is not completely corresponds to IMF requirements to Free used currency, Renminbi has been included in a basket for preservation of stability of the international currency system. So, the inclusion technique in a basket can be used former, i.e. an IMF technique. We believe that threshold value for inclusion in a basket i national currency can be 0.5-1 % of calculations in the international payment systems.
Reviewer 2 Report
The title of the manuscript is too general. The abstract must clarify what the authors researched and the conclusions they reached in a more clear way. The text is full of general ideas, a lot of them expressed in an informal manner. The literature review of this manuscript is extremely broad and general. For much of the time, it relies on general characterisations and assertions, rather than precise statements, linear arguments and solid evidence. Numerous ideas are not supported by scientific sources. The paragraphs should be larger. A lot of them include 2–3 lines, and this is unusual. The authors should detail how other studies develop the empirical analysis (i.e. type of data, experiment, etc.) in order to allow the reader to better compare their work with other existing studies and understand their contribution to the literature. The results as they are currently presented appear superficial and more context and discussion of the results is required. While the line of argumentation is traceable throughout the paper, it is minimally supported and thus weakened at several crucial points. Quoted citations must include page(s). A stronger conclusion is required. There is some discussion of the limitations of the study however these are not considered in terms of the implications on the study findings. The future research directions should be a bit clarified/developed. The reference list is poorly edited and includes too many old and/or second-rates sources. The authors must focus especially on recent and relevant articles published in journals indexed in Scopus and Web of Science.
Author Response
Response to Reviewer 2
Dear Reviewer 2,
Allow to present the new manuscript version to your review. Your remarks, comments and suggestions are so fundamental that cover all paper. Therefore, please accept for second review modified and revised full text of the manuscript in which allocate in red all changes.
For convenience please use an Index of our changes under concrete remarks and instructions regarding number of lines.
“The title of the manuscript is too general”.
Response: The title was changed with “Restructuring of the Global Economy” on “Global Economy: New Risks and Leadership Problems”.
“The abstract must clarify what the authors researched and the conclusions they reached in a more clear way”.
Response: Abstract was cardinally reconsidered and offer a new variant (lines 11-28).
“The text is full of general ideas, a lot of them expressed in an informal manner”.
Response: The text was cleaned of general representations and not scientific lexicon. Lines: 62-71, 197, 251-282, 293-298, 307-310, 334, 471-494, 613, 644-647.
“The literature review of this manuscript is extremely broad and general. Numerous ideas are not supported by scientific sources. Quoted citations must include page(s). The authors must focus especially on recent and relevant articles published in journals indexed in Scopus and Web of Science”.
Response: Please pay attention to remark in the beginning of section 4. Discussion. Lines 585-588. In the text of the manuscript is not a lot of direct references on authors. But it was used in particular thesis of Lagard, Baldacci (lines 212-214, 501-505). In section 4. Discussion (lines 616-700) was systematized many interesting and important concrete ideas of international institutes and many authors with instructions of pages. Some thesis has analyzed more particularly, for example, Valascova (lines 638-643). Many of these ideas can become a subject of separate scientific research.
I study global financial and economic environment from 1998. Many positions, ideas, formulations became a result of over-year researches, which were published in books, articles, conferences. Researchers, experts, analysts are in global system which constantly changes. Many formulations, estimations change on a statistics basis. Ideas of article are based first of all on the Data statistics and the facts. The reference to them is latest, full, and also adequately resulted in the manuscript. We tried to be in this question are corrected and adequate as much as possible. In the paper are used data and researches as sources of last years, including 2017-2019. Please kindly note, in particular: BIS: lines 762, 764, 766, 768; IMF: lines 792, 796, 798, 888; FED: lines 780; U.S. Statistics: lines 865, 868; UN: 871, 874; scientific researches: lines 771, 776, 778, 783, 785, 789, 807, 809, 815, 826, 854, 860, 882, 894. Some articles published in Journals indexed in WOS or Scopus. See in particular lines: 789, 807, 824, 830, 854, 882, 894.
“The paragraphs should be larger.”
Response: The size of paragraphs was increased under all manuscript that is visible even at article viewing.
“The results as they are currently presented appear superficial and more context and discussion of the results is required”
Response: Modified version consistently shows the results of research through all sections of article. See lines: 14, 15, 23-28, 119, 184-195, 200-201, 232, 306-307, 539, 540, 566-605, 586-679.
“A stronger conclusion is required.”
Response: It is prepared the new conclusion in which have connected the abstract, purposes (lines 53-61) and problems. See lines: 701-752.
“The future research directions should be a bit clarified/developed”.
Response: The choice of future research directions is explained at lines: 735-752.
Round 2
Reviewer 2 Report
English needs some improvement. The reference list needs better editing.
