The Defects of the Dollar-Centered Global Financial System
Anthony Elson
Chapter Chapter 5 in The Global Currency Power of the US Dollar, 2021, pp 73-93 from Springer
Abstract:
Abstract This chapter analyzes the various costs for other countries and the risks to global financial stability associated with the current dollar-dominated international financial system. Discussion focuses initially on the volatility of international capital flows that can be identified with the global financial cycle and private traders’ responses to changes in Federal Reserve policy. The chapter also considers the costs for emerging market economies of accumulating US government debt securities (“safe” assets) as a self-defense mechanism against capital flow volatility because of defects in the Global Financial Safety Net. The chapter closes with a discussion of the problem of global imbalances and the absence of an institutional mechanism to reduce these as a threat to global financial stability.
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-83519-4_5
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DOI: 10.1007/978-3-030-83519-4_5
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