Donald Trump’s assault on the political independence of the U.S. Federal Reserve has been brewing for a long time. And his attack on central bank independence is also not limited to the United States. Governments in other countries have been at it for a while now. The reason is simple. The ‘Great Moderation’ achieved by monetary economists in the 1990s and early 2000s proved unsustainable. The ensuing crisis made it easy for politicians to challenge central bank independence.
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To understand the future of dollar dominance, you need to understand its past. The recent books about the early experiences of the U.S. Federal Reserve System (Mark Carlson), the spread of U.S. banks abroad (Mary Bridges), and the resilience of the dollar as a global currency (Paul Blustein), offer essential insights for any debate about how either other national currencies or new technologies could replace the dollar in world markets. The dollar’s emergence as a global currency came unexpectedly; its disappearance may be unexpected as well.
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Erik Jones 