Tuesday, April 5, 2011
Summary of "The Role of the Dollar: Who Cares?" By Amer Handan
Paul Krugman basically accesses the importance of the dollar in the global monetary market in response to criticism from Hu Jintao. He concludes that the U.S. does enjoy certain benefits from its currency dominance, such as virtually zero-interest loans. However, by using Australia as an example of a country that has a relatively large international level of debts, he finds that the US's ability to borrow so much money and hold so much debt is not necessarily unique. Ultimately, he thinks that the international role of the dollar in the global economy does not really make that much difference to US economic power as a whole.