Ideas For The Future of The International Monetary System

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The philosopher George Santayana famously said, “Those who cannot remember the past are condemned to repeat it.”

The U.S. dollar’s dominance seems under threat. The near collapse of the U.S. financial system in 2008-2009, political paralysis that has blocked effective policymaking, and emerging competitors such as the Chinese renminbi have heightened speculation about the dollar’s looming displacement as the main reserve currency. Yet, as The Dollar Trap powerfully argues, the financial crisis, a dysfunctional international monetary system, and U.S. policies have paradoxically strengthened the dollar’s importance.

Economies are deeply complex systems. The global marketplace even national, state and local economies involve many economic actors behaving in rational and irrational ways, sustaining a dizzying array of interconnected activity. Because of the number of participants involved in this global exchange, the unpredictability of their actions, and the sheer variety of possible actions, some degree of economic uncertainty is inevitable.

Economies are deeply complex systems. The global marketplace—even national, state and local economies—involve many economic actors behaving in rational and irrational ways, sustaining a dizzying array of interconnected activity. Because of the number of participants involved in this global exchange, the unpredictability of their actions, and the sheer variety of possible actions, some degree of economic uncertainty is inevitable.