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Since central banks, institutional investors and corporations active in international transactions are the key actors in determining reserve currency preferences, the question of whether a currency is a “store of value” becomes crucial, especially if a long-term weakening trend is perceived for a currency, as is the case with the USD. When China and Japan accumulate dollar-denominated reserves, those become national savings, meaning those countries are sensitive to the purchasing power of those reserves translated into their own currency. A reserve currency’s exchange rate trend thus becomes a critical factor in other countries’ willingness to hold it in its official reserves. This is especially true for the real exchange rate. The trade-weighted index for the dollar, measured in real terms against our major trading partners, has declined over 30% since its high point in mid-1985. The euro’s comparable index is up approximately 10% from 2000, although it has had substantial fluctuations since inception.

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An interesting phenomenon of frontal lobe damage is the insignificant effect it can have on traditional IQ testing. Researchers believe that this may have to do with IQ tests typically assessing convergent rather than divergent thinking. Frontal lobe damage seems to have an impact on divergent thinking, or flexibility and problem solving ability. There is also evidence showing lingering interference with attention and memory even after good recovery from a TBI (Stuss et al., 1985).

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Another area often associated with frontal damage is that of "behavioral sponteneity." Kolb & Milner (1981) found that individual with frontal damage displayed fewer spontaneous facial movements, spoke fewer words (left frontal lesions) or excessively (right frontal lesions).


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The euro was welcomed at birth on Jan. 1, 1999, as a new financial currency (coins and banknotes were issued three years later) and hoped by its promoters to be an alternative to the dollar, which had reigned as the world’s primary reserve currency since the 1944 Bretton Woods agreement. In its early years, the share of global official foreign exchange reserves denominated in EUR rose rapidly, while those in USD declined. But the Euro-zone debt crisis threatened, from late 2009, the euro’s very existence, making any speculation that it might replace the dollar as the world’s principal reserve currency seem a bad joke. The existential threat to the currency and even the European Union (EU), forced Euro-zone governments, the European Central Bank and the banking system to forge a more credible governmental, financial and regulatory structure to support the euro.

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On its 15th birthday, perhaps it is time to consider whether the euro is, or can remain, a viable reserve currency. But first, what is a reserve currency ? First, it must be a currency important and credible enough to be used widely for international trade and capital transactions between countries other than the one issuing the currency. Second, the currency must be supported by a large and stable economy; and a government whose fiscal and monetary policies inspire the confidence of international traders and investors. Third, the currency’s exchange value must be relatively stable and predictable enough so that the world’s central banks are willing to accumulate and hold the currency in their official foreign exchange reserves.

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Disturbance of motor function is typically characterized by loss of fine movements and strength of the arms, hands and fingers (Kuypers, 1981). Complex chains of motor movement also seem to be controlled by the frontal lobes (Leonard et al., 1988). Patients with frontal lobe damage exhibit little spontaneous facial expression, which points to the role of the frontal lobes in facial expression (Kolb & Milner, 1981). Broca's Aphasia, or difficulty in speaking, has been associated with frontal damage by Brown (1972).

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Levin et al. (1987). Magnetic resonance imaging and computerized tomography in relation to the neurobehavioral sequelae of mild and moderate head injuries. Journal of Neurosurgery, 66, 706-713.

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Miller, L. (1985). Cognitive risk taking after frontal or temporal lobectomy. I. The synthesis of fragmented visual information. Neuropsychologia, 23:359-369.