WSJ's Take On the Week Why This Harvard Economist Is Worried About the U.S. Dollar
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May 11, 2025 
Ken Rogoff, a Harvard economist and former IMF chief economist, discusses his concerns about the declining purchasing power of the U.S. dollar. He emphasizes its implications for consumers and investors, linking it to themes of 'American exceptionalism.' The conversation explores the dollar's waning supremacy in global finance and the potential rise of alternative currencies. Rogoff also touches on the historical context and future challenges the dollar may face, providing keen insights from his new book, "Our Dollar, Your Problem."
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Dollar's Value vs Use Diverge
- The dollar's value and its global use are distinct concepts; value is high but use has peaked and is gently declining.
- The dollar remains dominant but is likely on a downward trend accelerated by current events.
Diversify Beyond U.S. Assets
- Diversify your investments beyond the U.S. due to the dollar's high value and shifting global dynamics.
- Consider European stocks as a potential beneficiary of diversification benefits.
Trade Policy Accelerates Dollar Decline
- Trump's tariff policy is highly unpredictable and counterproductive, accelerating trends adverse to the dollar.
- Long-term structural problems like U.S. deficits and sanctions undermine the dollar's dominance beyond administration policies.
