Love it or hate it... the dollar's here to stay

Eswar Prasad interviewed by Viv Davies, 29 Mar 2014

Eswar Prasad talks to Viv Davies about his recent book, ‘The Dollar Trap: How the US dollar tightened its grip on global finance’, which examines how, paradoxically, in light of the financial crisis, the dollar continues to play a central role in the world economy and why it will remain the cornerstone of global finance for the foreseeable future. They also discuss the current frameworks for international economic cooperation as well as currency wars, unconventional monetary policy and the prospects for the renminbi becoming the world's reserve currency. The interview was recorded in London in March 2014.

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See Also

Prasad, Eswar S (2014) The Dollar Trap: How the U.S. dollar tightened its grip on global finance , Princeton University Press.

Transcript

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Topics: Exchange rates
Tags: Currency wars, Emerging-market economies, exchange-rate policy, foreign exchange reserves, international currency

Policymaking in crises: Pick your poison

Kristin Forbes, Michael W Klein, 24 December 2013

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In 2010, the Brazilian finance minister Guido Mantenga declared a ‘currency war’ because of the harmful effects of the strengthening of the real. He blamed the currency’s appreciation on easy money in advanced countries, and to a lesser extent on reserve accumulation in some emerging markets.

Topics: Exchange rates, Macroeconomic policy
Tags: Brazil, capital controls, currency war, exchange rates, foreign exchange reserves, global financial crisis, India, Indonesia

Shifting motives: Explaining the build-up in official reserves in emerging markets since the 1980s

Atish R Ghosh, Jonathan D Ostry, Charalambos Tsangarides, 6 February 2012

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Over the past few decades, despite greater exchange-rate flexibility, emerging economies have been accumulating large stocks of international reserves. Reserve holdings, which averaged about 5% of GDP in the 1980s, have been doubling every decade since, reaching some 25% of GDP by 2010.

Topics: Development, International finance, International trade
Tags: Emerging-market economies, exchange-rate policy, foreign exchange reserves

Policymakers must prevent financial institutions from becoming too connected to fail

Jorge A. Chan-Lau, Marco A. Espinosa-Vega, Kay Giesecke, Juan Solé, 2 May 2009

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How should governments handle large and complex financial institutions that are “too big to fail” and “too connected to fail”?

Topics: Financial markets
Tags: currency crisis, exchange rate, foreign exchange, foreign exchange reserves, IMF, Too big to fail, too connected to fail

Sovereign wealth funds, governance, and reserve accumulation

Joshua Aizenman, Reuven Glick, 16 January 2009

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Sovereign wealth funds (SWFs) are saving funds controlled by sovereign governments that hold and manage foreign assets.

Topics: International finance
Tags: foreign exchange reserves, governance, sovereign wealth funds

The fallout from the global credit crisis: Contagion - emerging markets under stress

Helmut Reisen, 6 December 2008

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The global credit crisis has taken some time to spread from the industrialised countries to the emerging markets. But in October 2008, the contagion spread rapidly, afflicting all emerging markets, without any distinction or regard to their so-called ' fundamentals'.

Topics: International finance
Tags: contagion, financial crisis, foreign exchange reserves

The euro could surpass the dollar within ten years

Jeffrey Frankel, 18 March 2008

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The International Economy recently asked experts: Ten years from now, which will likely be the next great global currency?

Topics: International finance
Tags: deficits, dollar, euro, foreign exchange reserves, international currency

The rise of the euro

Richard Portes, 14 June 2007

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Will the euro replace the dollar as the leading international currency?

Topics: Exchange rates
Tags: euro, foreign exchange reserves, reserve currency

The fuss about foreign exchange reserves accumulation

Charles Wyplosz, 28 May 2007

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Over the last decade, central banks around the world have quadrupled the size of their foreign exchange reserves. The case of China, which multiplied its own stock by a factor of ten, is often mentioned as an example of these excesses, but China is not alone. Total reserves of sub-Sahara African countries have also risen by a factor of ten.

Topics: Exchange rates
Tags: external liabilities, foreign exchange reserves, GDP

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