Ratings Agencies Downgrade the Dollar’s Exorbitant Privilege

L. Randall Wray

Economics Policy Note Archive from Levy Economics Institute

Abstract: In this note, we will first address the issue of rating sovereign government debt: Do the credit raters know how to do it, and does it make any sense to do it? We will conclude that the answer to both is "no." We then turn to possible negative impacts of government deficits and debt--and assess how likely it is that the US faces them. Finally, we address the claim that the dollar has provided an exorbitant privilege to the US and whether that may be coming to an end.

Date: 2025-05
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