Search

Begin New Search Political Geography United States Author Barry Eichengreen

1. The Dollar Dilemma

Author:
Barry Eichengreen
Publication Date:
09-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
Legions of pundits have argued that the dollar's status as an international currency has been damaged by the great credit crisis of 2007-9 -- and not a few have argued that the injury may prove fatal. The crisis certainly has not made the United States more attractive as a supplier of high-quality financial assets. It would be no surprise if the dysfunctionality of U.S. financial markets diminished the appetite of central banks for U.S. debt securities. A process of financial deglobalization has already begun, and it will mean less foreign financing for the United States' budget and balance-of-payments deficits. Meanwhile, the U.S. government will emit vast quantities of public debt for the foreseeable future. Together, these trends in supply and demand are a recipe for a significantly weaker dollar. And as central banks suffer capital losses on their outstanding dollar reserves, they will start considering alternatives. This is especially likely because these trends are superimposed on an ongoing shift toward a more multipolar world. The growing importance of emerging markets has sharply reduced the United States' economic dominance, weakening the logic for why the dollar should constitute the largest part of central-bank reserves and be used to settle trade and financial transactions. As emerging markets grow, they naturally accumulate foreign reserves as a form of self-insurance. Central banks need the funds to intervene in the foreign exchange market so that they can prevent shocks to trade and financial flows from causing uncomfortable currency fluctuations. This capacity becomes more important as previously closed economies open up and when international markets are volatile, as has been the case recently. It is only logical, in other words, for emerging markets to accumulate reserves.
Topic:
Financial Crisis
Political Geography:
United States

2. The Euro Through a Glass Darkly

Author:
Barry Eichengreen
Publication Date:
09-2003
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
On January 1st, Europe's monetary union will celebrate its fifth anniversary. Congratulations are not exactly pouring in. For going on two years, growth in the countries of the Euro Area has been significantly slower than in the United States. Unemployment over much of the continent remains disturbingly high. The single currency has not been a tonic for Europe's stagnant economy. To the contrary, numerous critics complain, the advent of the euro has only compounded Europe's economic problems. This paper provides a review and analysis of the debate.
Topic:
Economics and Political Economy
Political Geography:
United States and Europe

3. Whither Europe?

Author:
Barry Eichengreen
Publication Date:
05-2003
Content Type:
Working Paper
Institution:
Institute of European Studies
Abstract:
Where I live, on the West Coast of the United States, and teach, at the University of California, Europe seems far away. Geographically we are closer to Latin America and Asia. Ethnically, Californians of Hispanic and Asian-American descent are increasingly numerous. Within 20 years, residents of European origin will be a minority; already they are a minority of the undergraduates enrolling at Berkeley. Economically as well, we look to Asia. It is in California where the largest number of container ships arriving from Asia are unloaded, and it is across the Pacific, and in China in particular, that most of those containers originate.
Topic:
Economics and Political Economy
Political Geography:
United States, China, Europe, Asia, California, and Latin America