Liberty Street Economics: The Dollar’s Imperial Circle

F E D E R A L   R E S E R V E   B A N K   o f   N E W  Y O R K LIBERTY STREET ECONOMICS   The Dollar's Imperial Circle    Ozge Akinci, Gianluca Benigno, Serra Pelin, and Jonathan Turek    The importance of the U.S. dollar in the context of the international monetary system has been examined and studied extensively. The authors argue that the dollar is not only the dominant global currency but also a key variable affecting global economic conditions. They describe the mechanism through which the dollar acts as a procyclical force, generating what they dub the "Dollar's Imperial Circle," where swings in the dollar govern global macro developments.     READ MORE

 

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