The U.S. greenback has served as the key forex of the worldwide financial/monetary system for over fifty years. This examine assesses the proposition that the sequence of U.S. current-account deficits over the final twenty years will shortly exhaust the functionality of the greenback to proceed as the key forex. The proof in help of the proposition is robust. The implications of exhaustion might be severe and should be addressed shortly.
‘Peter Gray presents a succinct story about the decline and fall of the U.S. dollar as a reserve currency, and the problems of developing an alternative arrangement that would facilitate international payments. Gray sketches the transition problem associated with the decline from a U.S. external payments position characterized by a current account deficit of six percent of GDP to a much smaller sustainable value.’ – Robert Z. Aliber, Professor of International Economics and Finance Emeritus, Graduate School of Business, University of Chicago, USA ‘In this study of the role of the US dollar within the global economic system, Peter Gray provides a masterly account, which should be of interest to academic economists and policy-makers alike. It is particularly timely to have such a thorough analysis of the logic of, and latest developments in, the international monetary system, whose reliance on one key currency creates such systemic problems.’ – Sheila C. Dow, Department of Economics, University of Stirling, UK
About the Author
- Peter Gray is Professor Emeritus of worldwide economics and enterprise at Rutgers, the State University of New Jersey and at Rensselaer Polytechnic Institute.