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The Dollar and its Discontents

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  • Olivier Jeanne

Abstract

Has the US dollar delivered the benefits that the rest of the world is expecting from its holdings of international liquidity? US government debt has been liquid and safe, and it is supplied in sufficient quantity. But it has given a low return to the countries that accumulated the most reserves, especially when those returns are measured in terms of the countries' own consumption. I argue in this paper that the countries that accumulate the most reserves should expect a low return in terms of their own consumption, and that there is little that international monetary reform can do to change that fact.

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  • Olivier Jeanne, 2012. "The Dollar and its Discontents," NBER Working Papers 18143, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18143
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    Cited by:

    1. Michael Bordo & Robert N. McCauley, 2017. "A Global Shortage of Safe Assets: A New Triffin Dilemma?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 45(4), pages 443-451, December.
    2. Pierre-Olivier Gourinchas & Olivier Jeanne, 2012. "Global safe assets," BIS Working Papers 399, Bank for International Settlements.
    3. Joshua Aizenman, 2015. "Internationalization of the RMB, Capital Market Openness and Financial Reforms in China," Pacific Economic Review, Wiley Blackwell, vol. 20(3), pages 444-460, August.
    4. Kumhof, Michael & Sokol, Andrej & Rungcharoenkitkul, Phurichai, 2020. "How Does International Capital Flow?," CEPR Discussion Papers 15526, C.E.P.R. Discussion Papers.
    5. Robert N McCauley, 2019. "Safe assets: made, not just born," BIS Working Papers 769, Bank for International Settlements.
    6. Aizenman, Joshua & Dekle, Robert & Lothian, James R., 2012. "Overview of the special issue on “Policy Implications of and Lessons from the Global Financial Crisis”," Journal of International Money and Finance, Elsevier, vol. 31(8), pages 1971-1975.
    7. Torinelli, Viviane Helena & Silva Júnior, Antônio Francisco de Almeida da, 2021. "Environmental risk analysis (ERA) in the strategic asset allocation (SAA) of the international reserves (IRs) managed by central banks (CBs)," Latin American Journal of Central Banking (previously Monetaria), Elsevier, vol. 2(1).
    8. McCauley, Robert N., 2015. "Does the US dollar confer an exorbitant privilege?," Journal of International Money and Finance, Elsevier, vol. 57(C), pages 1-14.
    9. Michael D. Bordo & Robert N. McCauley, 2019. "Triffin: Dilemma or Myth?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(4), pages 824-851, December.
    10. Michael D. Bordo & Robert N. McCauley, 2016. "The Current Account Version of the Triffin Dilemma," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 44(2), pages 171-182, June.

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    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F3 - International Economics - - International Finance
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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