https://hdl.handle.net/10419/251227 2026-09-22T21:38:11Z https://hdl.handle.net/10419/339510 Title: The under-theorisation of dollar dominance Authors: Lysandrou, Photis Abstract: The recent period has seen an upsurge in predictions that the dollar's international dominance will at some point be challenged by a rival currency, notably the euro. This paper counters these predictions. It argues that the overestimation of the euro's ability to challenge dollar dominance is due to the under-theorisation of the foundations of that dominance, the root problem being macroeconomic theories' tradition of taking the household investor to be the representative investor when it should in reality be an institutional asset manager. If financial securities are viewed through the lens of the institutional investor it becomes clear that there can be no exodus from the dollar because it becomes clear that foreign investors remain attracted to the US capital market for reasons as much to do with its mass and consequent gravitational force as to do with a shortage of securities that can be supplied by other capital markets. 2026-01-01T00:00:00Z https://hdl.handle.net/10419/324382 Title: Dollar colonisation: The destructive policy implications of modern monetary theory Authors: Lysandrou, Photis Abstract: Modern monetary theory argues that all governments that issue their own currency have the same policy space. The present paper argues that this position is wrong. For it to be valid, abstraction must be made from the gravitational force of the US dollar that stems from its backing mass of securities and is transmitted through international investment flows. On recognition of this gravitational force, it becomes clear that the huge size disparity separating the US financial market from those of other markets, and most notably those of the EMEs, translates into an equally huge disparity regarding policy space. The policy implications for EME governments are that they should, where possible, join their financial markets into regional blocs of sufficient sizes as can give their regional currencies enough backing mass to allow them to resist the gravitational pull of the dollar. Only by pooling their currency sovereignty can EME governments retain some scope for pursuing policies independently of those pursued by the US government. On the contrary, any such scope is destroyed if EME governments in countries with small financial markets follow the MMT's advice to retain their local currencies because that advice condemns these currencies to entrapment in the dollar's gravitational field and even possibly to outright dollar colonisation. 2025-01-01T00:00:00Z https://hdl.handle.net/10419/324388 Title: Public debt and the income share of the top 1 % in the US, 1960-2019 Authors: Papadopoulou, Aggela Abstract: This study theorizes the relationship between sovereign debt and income inequality and shows that increases in public indebtedness are robustly associated with increases in the income share of the top one percent in the US since the 1960s. First, the paper outlines the mechanisms through which public debt is linked to the top one percent income share, via interest payments and capital gains from bond trading. Subsequently, it scrutinizes the evolution of public debt and the income share of the top one percent in the US, in parallel with the historical development of political and economic institutions. Building on the historical analysis, it demonstrates econometrically that interest payments and total returns on domestic and foreign public debt are positively associated with the income share of the top one percent in the US for the period 1960 to 2019. 2025-01-01T00:00:00Z https://hdl.handle.net/10419/339443 Title: The under-theorisation of dollar dominance Authors: Lysandrou, Photis Abstract: The recent period has seen an upsurge in predictions that the dollar's international dominance will soon be challenged by a rival currency, with the euro currently tipped as the leading contender. This paper counters these predictions. It argues that the overestimation of the euro's ability to challenge dollar dominance comes down to the under-theorisation of the foundations of that dominance, the root problem in this context being macroeconomic theories' tradition of taking the household investor to be the representative investor when it should in reality be an institutional investor. It is well known that the dollar's current dominance rests heavily on the substantial size of the US' capital market and on the substantial involvement of foreign investors in that market but if financial securities are viewed through the lens of the household investor, it then follows that there is nothing preventing a foreign exodus from the US such as will reduce its capital market to a size comparable with the eurozone market thereby enabling the euro to rival the dollar. On the contrary, if financial securities are viewed through the lens of the institutional investor it then becomes clear that there can be no exodus from the US capital market on the scale necessary for undermining the dollar's dominance because it then becomes clear that foreign investors remain strongly attracted to this market for reasons as much to do with its mass and consequent gravitational pull as to do with a shortage of securities that can be supplied by other capital markets including that of the eurozone. 2025-01-01T00:00:00Z