Odd Lots Why The Dominant U.S. Dollar Refuses To Go Away
Sep 16, 2019
David Beckworth, a Senior Research Fellow at the Mercatus Center and an expert in economics, delves into the surprising resilience of the U.S. dollar despite predictions of its downfall. He discusses the complex factors behind its enduring dominance, including the Triffin dilemma and the implications for global finance. Beckworth explores the challenges posed by potential rival currencies like the euro and renminbi, and the dollar's critical role in both globalization and current economic dynamics. A lively conversation sprinkled with humor adds to the insights!
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Dollar's Persistent Strength
- The US dollar remains strong despite predictions of its demise.
- This strength is now considered a problem by some experts.
Strong Dollar's Impact on US Economy
- A strong dollar benefits the US finance industry but harms manufacturing.
- It also leads to higher trade and budget deficits due to overvaluation.
Demand for US Assets
- Global demand for US assets, like Treasuries and GSE debt, drives dollar strength.
- This demand stems from the dollar's widespread use and network effects.
