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The IPE of International Currency Leadership

  • Mattias Vermeiren
Chapter
Part of the Palgrave Handbooks in IPE book series (PHIPE)

Abstract

This chapter reviews the sources and implications of international currency leadership by drawing lessons from the global financial crisis. The US dollar remains the world’s top currency because the United States continues to be the largest supplier of ‘safe assets’ in the global economy. Relatively accommodative macroeconomic policies and institutions in the United States have underpinned this role. At the same time, being the world’s predominant safe asset provider came at the expense of a ballooning deficit on the US external balance sheet after the crisis. However, there are no indications that the deterioration in the US external balance sheet has constrained the structural capacity of the United States to avoid the burden of macroeconomic adjustment—which remains the ultimate yardstick of international monetary power.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Mattias Vermeiren
    • 1
  1. 1.Ghent UniversityGhentBelgium

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