3 thoughts on ““Why dollar dominance is here to stay””

  1. Moses Herzog

    Should be awesome, love listening to Sobel talk. The only thing make this better is if Gopinath was giving a speech also.

  2. Macroduck

    From the intro:

    “We conclude our essay by noting that the key question is not whether the dollar’s dominance will be sustained, but rather will the factors that have supported the dollar’s dominance, and that have provided benefits to the global economic and financial system as well as the United States, be sustained? We note that the direst threat to the dollar emerges from the United States itself, with partisan divisions, political dysfunction, and the resultant inability to cope with the nation’s challenges posing important risks to the country’s economic and financial prospects. Were those risks to materialize, the loss of the dollar’s dominance would be the least of our problems.”.

    Much of the argument made in the paper has been made by Menzie here and elsewhere in his work – liquidity ,safety, and “moneyness”.

    That paper also notes occasional efforts to find an alternative to the dollar, concluding that, as noted in the quote above, the usefulness of the dollar in foreign trade and finance is so great that it is really only bad doings from the U.S. that are likely to cause the dollar to lose its pre-eminence. Russia, Iran, North Korea and others, perhaps some day including China, will imply have to bear the cost of exclusion from dollar-based finance if they choose to violate established international norms.

    Some may argue that AEI is an unreliable source for such views, but this paper mostly repeats things we already know. Also, Mark Sobel is not, to my knowledge, affiliated with AEI.

    1. Moses Herzog

      Honestly, I don’t like “AEI” , because I like Menzie and the people involved, I have nothing bad to say here. And Gopinath should take a “red eye” flight here.

      I don’t ask much, just that every and all my smallest whims be met.

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