The Dollar Is Everyone’s Problem
In recent decades, the US Federal Reserve’s monetary policy disproportionately affected emerging-market and developing economies. But interest-rate differentials between the Fed and other advanced-economy central banks are showing the world’s rich countries that the dollar’s enormous global impact is a problem for everyone.
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CAMBRIDGE – In 1971, US Treasury Secretary John Connally famously told his counterparts in the G10 that “the dollar is our currency, but it’s your problem.” Connally was being unexpectedly candid about the fact that, even though the greenback was the world’s main reserve currency, its foremost purpose was to advance US interests.