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Rehabilitating the unloved dollar standard
Author(s) -
McKin Ronald
Publication year - 2010
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/j.1467-8411.2010.01258.x
Subject(s) - liberian dollar , exchange rate , economics , monetary economics , libor , us dollar , asset (computer security) , international economics , interest rate , finance , computer security , computer science
The international dollar standard is an accident of history that greatly facilitates international trade and exchange. But erratic US monetary and financial policies have upset the American and world economies so as to make foreigners unhappy. A weak and falling dollar led to the great price inflations of the 1970s and to disastrous asset bubbles in the noughties. It aggravated the post‐War World's three great oil shocks. The asymmetrical nature of the dollar standard also makes many Americans unhappy because they cannot control their own exchange rate. Although nobody loves the dollar standard, it is a remarkably robust institution that is too valuable to lose and too difficult to replace. Rehabilitating the unloved dollar standard by ‘internationalising’ American monetary and financial policies to better stabilise the USA and world economies is the only way out of the current impasse.