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Title:The global crisis and the future of the dollar: Toward Bretton Woods III? PDF Logo
Authors:Bibow, Jörg
Issue Date:2010
Series/Report no.:Working paper, Levy Economics Institute 584
Abstract:This paper investigates the United States dollar's role as the international currency of choice as a key contributing factor in critical global developments that led to the crisis of 2007-09, and considers the future role of the dollar as the global economy emerges from that crisis. It is argued that the dollar is likely to retain its hegemonic status for a few more decades, but that United States spending powered by public rather than private debt would provide a more sustainable motor for global growth. In the process, the 'Bretton Woods II' regime depicted by Dooley, Folkerts-Landau, and Garber (2003) as sustainable despite featuring persistent U.S. current account deficits may turn into a 'Bretton Woods III' regime that sees U.S. fiscal policy and public debt as 'minding the store' in maintaining U.S. and global growth.
Subjects:reserve currency
global monetary order
global financial crisis
JEL:E12
E61
E62
F02
F33
Document Type:Working Paper
Appears in Collections:Working Papers, Levy Economics Institute of Bard College

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