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On Defense, France Bites the Bullet, But Avoids Strategic Insolvency May 7, 2013
Iceland’s Recovery Saga Presents Opportunities for Brussels, Washington—and Beijing May 6, 2013
Which Way Forward for Europe’s Hybrid Regimes? May 2, 2013
The Arab Revolts and the Liberal Order May 2, 2013
Events
GMF celebrates its 40 year history and Founder and Chairman, Dr. Guido Goldman at Gala Dinner May 09, 2013 / Washington, DCGMF held a celebratory gala dinner at the United States Institute of Peace in Washington, Wednesday May 8.
In this podcast, GMF Vice President of Programs Ivan Vejvoda discusses last month's historic agreement to normalize relations between Kosovo and Serbia.
Anchor Elaine Reyes speaks with Andrew Small, Transatlantic Fellow of the Asia Program for the German Marshall Fund, about Beijing's potential role in brokering peace between Israel and Palestine
The Dollar Question: Where Are We?
July 09, 2010 / Kati Suominen
The global crisis has led some to question the dollar’s place as the dominant currency. This column discusses three camps in the literature: those advocating a new synthetic global currency, those arguing that a new reserve currency will emerge, and those suggesting a return to sharing the role. It concludes that talk of the dollar’s death – or even its decline – are exaggerated.
The global crisis and US economic travails triggered a firestorm debate on the future of the global currency regime.
- At the London G20 Summit in April 2009 China’s central bank governor Zhou Xiaochuan slighted the dollar-centric order, calling for a super-sovereign reserve currency – a reference to special drawing rights (SDRs) housed at the IMF.1
- Russian President Dmitry Medvedev called for a mix of regional currencies;
- Some western opinion leaders warmed to the euro’s leadership (see for example Zoellick 2009).
Washington refuted these notions. Instead it pledged fiscal discipline to help buttress the greenback. ECB head Jean-Claude Trichet also argued for the dollar’s importance in the world economy (Reuters 2009a).
At last week’s G20 Summit in Toronto, currencies went practically unmentioned. This reflects the US recovery; the fall of its most plausible contender, the euro, amid Europe’s economic woes; and perhaps China’s deflecting attention from its exchange-rate management. Despite this, the debate continues to simmer as US debt and trade deficits grow. In line with the Triffin Dilemma2, this raises concerns about the dollar’s viability and trade protectionism in America. Three main camps of literature explore the alternatives to the dollar as the global reserve currency – yet each has important drawbacks.
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