The Economics Show
Martin Wolf talks to Kenneth Rogoff: Trump is accelerating the dollar’s decline
May 5, 2025
Kenneth Rogoff, a Harvard economics professor and former IMF chief economist, discusses the US dollar's slow decline and Trump's trade policies. He delves into how the dollar's weakening may empower China and lead to capital flight from the US. Rogoff highlights the surprising threat cryptocurrency poses to dollar dominance, suggesting it could disrupt traditional currency dynamics. The conversation also touches on the need for fiscal stability amid turbulent economic conditions, making it a must-listen for those curious about the future of global finance.
30:18
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Quick takeaways
- Trump's trade policies are accelerating the dollar's decline, prompting countries to seek alternative currencies for stability.
- The rise of cryptocurrencies poses a significant threat to dollar hegemony, potentially disrupting global financial dynamics.
Deep dives
The Erosion of Dollar Dominance
The U.S. dollar has been the world's dominant currency for decades, but its supremacy is facing significant challenges. Factors such as high U.S. deficits, aggressive tariffs, and an increasing reliance on financial sanctions have led to a gradual decline in the dollar's market share since around 2015. Countries like China and others are reconsidering their currency ties, especially in light of events like the U.S. seizure of Russian central bank assets. This growing frustration with U.S. economic policies may accelerate the move towards alternative currencies like the euro and the renminbi.
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