The Group of Eight countries and the outreach participants in the July 8-10 summit in L'Aquila, Italy, discussed promotion of an international currency system that is stable and functions well. But it remains an elusive goal to find concrete ways of reforming the system.
Economist John Maynard Keynes once likened the currency exchange market — a key to an international currency system — to a vote in a beauty contest. Exchange rates reflect the relative comparison of the currencies involved.
Beauty contest judges pick who they perceive as the most beautiful contestant. Just as the criteria for judging a beauty contest includes height, weight as well as bust, waist and hip measurements, market participants have a set of criteria in choosing from among various currencies.