For half a century, the United States has garnered substantial political and economic benefits as a result of the dollar's de facto role as a global currency. In recent years, however, the dollar's preponderant position in world markets has come under challenge. The dollar has been more volatile than ever against foreign currencies, and various nations have switched to non-dollar instruments in their transactions. China and the Arab Gulf states continue to hold massive amounts of U.S. government obligations, in effect subsidizing U.S. current account deficits, and those holdings are a point of potential vulnerability for American policy.
What is the future of the U.S. dollar as an international currency? Will predictions of its demise end up just as inaccurate as those that have accompanied major international financial crises since the early 1970s? Analysts disagree, often profoundly, in their answers to these questions. In The Future of the Dollar, leading scholars of dollar's international role bring multidisciplinary perspectives and a range of contrasting predictions to the question of the dollar's future. This timely book provides readers with a clear sense of why such disagreements exist and it outlines a variety of future scenarios and the possible political implications for the United States and the world.
Contributors: David Calleo, The Johns Hopkins University; Benjamin Cohen, University of California, Santa Barbara; Marcello de Cecco, Scuola Normale Superiore di Pisa, Italy; Eric Helleiner, University of Waterloo; Harold James, Princeton University and European University Institute; Jonathan Kirshner, Cornell University; Ronald I. McKinnon, Stanford University; Herman Schwartz, University of Virginia
"This book offers great value in presenting different approaches and views on the future of the dollar. And reading through a rather heterogeneous collection of contributions one cannot but agree with editors Helleiner and Kirshner that the field of dollar studies is so ridden with disagreements that it would be virtually impossible to conclude with a coherent, let alone common, view."—Paola Subacchi, International Affairs, January 2010
"Eric Helleiner and Jonathan Kirshner have brought together an outstanding group of economists, historians, and political scientists to explore one of the most important questions in today's global economy: whether the dollar will stay on top. This book is as important as it is timely."—Daniel Drezner, Tufts University
"The question of whether the dollar will remain the leading international currency has acquired new salience in the wake of the crisis. History suggests yes, the incumbency delivered by history being an advantage in reserve currency competition. But politics say no, political rivalry with China being an important factor potentially working in the other direction. All this renders the present volume, which brings together not just economists but also historians and political scientists, timely and important."—Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley
"This is a superb and timely volume, displaying the insights of political scientists and economists. It should be read by members of both disciplines and everyone else interested in the future of the international monetary system."—Peter B. Kenen, Walker Professor of Economics and International Finance Emeritus, Princeton University
"The end of dollar preeminence has been predicted for decades. It has stubbornly refused to arrive. Assembling an A list of experts, this volume asks whether the dollar-centric financial system is likely to change complexion, and what this might mean for the distribution of global power. For anyone interested in the intersection of international relations and international economics, this is a feast of scholarship and ideas."—Sebastian Mallaby, Director of the Center for Geoeconomic Studies, The Council on Foreign Relations
"Differing forecasts for the dollar's future are easy to come by. Thoughtful analyses of the sources of the dollar's strength and role, analytically sound and carefully contrasted, grounded in the perspective of international political economy, are a rare treat. Eric Helleiner, Jonathan Kirshner, and their authors have done a real service for political scientists, economists, students, and market participants alike with The Future of the Dollar."—Adam S. Posen, Deputy Director, Peterson Institute for International Economics