The Political Economy of Reducing the US Dollar’s Role as a Global Reserve Currency

Josef T. Yap
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Josef T. Yap: Asian Development Bank Institute

No 302, ADBI Working Papers from Asian Development Bank Institute

Abstract: Many have argued that the major source of the existing global macroeconomic imbalances are the twin deficits of the United States (US). However, there is still a debate about whether the global imbalances indeed pose a significant threat to the world economy. This paper analyzes whether current efforts in East Asia in terms of financial and monetary cooperation and rebalancing of economic growth could significantly mitigate the adverse impacts of a global system that will still be dominated by the US dollar in the foreseeable future. It also explains why the People’s Republic of China is unlikely to make significant unilateral adjustments to reduce global macroeconomic imbalances.

Keywords: east asia; global macroeconomic imbalances; rebalancing economic growth; financial and monetary cooperation (search for similar items in EconPapers)
JEL-codes: F31 F33 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011-08-04
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-mon and nep-sea
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