The Special Role of the U.S. Dollar

Much of global trade in goods and services is denominated in U.S. dollars. The dollar is widely used for bilateral trade between countries other than the United States. And the use of the dollar is even more dominant in global financial transactions. What advantages accrue to the United States from the dominance of the dollar? Are there costs associated with it as well? Does the importance of the dollar require a special role for the Federal Reserve at times of crises? Linda Goldberg, a Financial Research Advisor at the Federal Reserve Bank of New York joins EconoFact Chats to discuss these issues. A leading expert on global banking, international capital flows, and the international roles of currencies, Linda previously served as Senior Vice President, the Head of Global Economic Analysis at the Federal Reserve Bank of New York.