The High Price of Dollar Dominance

{
  "authors": [
    "Michael Pettis"
  ],
  "type": "legacyinthemedia",
  "centerAffiliationAll": "dc",
  "centers": [
    "Carnegie Endowment for International Peace"
  ],
  "collections": [
    "Economic Risk in Asia"
  ],
  "englishNewsletterAll": "asia",
  "nonEnglishNewsletterAll": "",
  "primaryCenter": "Carnegie Endowment for International Peace",
  "programAffiliation": "AP",
  "programs": [
    "Asia"
  ],
  "projects": [],
  "regions": [
    "North America",
    "United States",
    "South America",
    "South Asia",
    "India",
    "East Asia",
    "China",
    "Russia"
  ],
  "topics": [
    "Economy",
    "Foreign Policy"
  ]
}

In The Media

The High Price of Dollar Dominance

The answer to Lula’s question of who designated the U.S. dollar the global reserve currency is ironic: it was surplus countries such as Brazil and China. And despite what their leaders might say, none of them are in a hurry to upend the current system.

By Michael Pettis

Published on Jun 30, 2023

About the Author

Michael Pettis

Nonresident Senior Fellow, Carnegie China

Michael Pettis is a nonresident senior fellow at the Carnegie Endowment for International Peace. An expert on China’s economy, Pettis is professor of finance at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets.

Recent Work

Commentary
Is China’s High-Quality Investment Output Economically Viable?
- Michael Pettis
Commentary
What GDP Means in a Soft Budget Economy Like China
- Michael Pettis

Economy Foreign Policy North America United States South America South Asia India East Asia China Russia

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

More Work from Carnegie Russia Eurasia Center

Commentary
Carnegie Politika
What Does Central Europe’s Post-Orban Russia Policy Look Like?
Though Orban is gone, Putin can still count on some like-minded individuals in Central and Eastern Europe. However, they will seek to avoid open confrontation with EU institutions over Ukraine and their ties with Moscow.

Dimitar Bechev
Commentary
Carnegie Politika
Are Russia-Japan Relations Really Warming Up?
The truth is that Japan’s government is seeking a degree of reengagement but at a vastly reduced level than under Abe. Most significantly, Japan has shown no willingness to ease sanctions.
James D.J. Brown
Commentary
Carnegie Politika
Brussels and Baku Are Talking Again: What Next?
Azerbaijan’s relations with the EU appear to be going from strength to strength after several years in the deep freeze following the military escalation in Karabakh in 2023 and Azerbaijan’s bitter fallout with France and several other EU member states.
Shujaat Ahmadzada
Commentary
Carnegie Politika
In Russia, Private Companies Have Been Left to Pick Up the Tab for Ukrainian Drone Attacks
The cost of air defense has become an unregistered tax on revenue for businesses. While military rents are consolidated in the federal budget, the costs of defense are being spread across the balance sheets of companies and regional governments.
Alexandra Prokopenko
Commentary
Carnegie Politika
As Trump Threatens to Quit NATO, the Baltic States Are Playing for Time
Governments in Estonia, Latvia, and Lithuania want to ensure that a U.S. military withdrawal would not leave them dangerously exposed to a Russian attack.
Sergejs Potapkins

More Work from Carnegie Russia Eurasia Center

Commentary

Carnegie Politika

What Does Central Europe’s Post-Orban Russia Policy Look Like?

Though Orban is gone, Putin can still count on some like-minded individuals in Central and Eastern Europe. However, they will seek to avoid open confrontation with EU institutions over Ukraine and their ties with Moscow.

Dimitar Bechev

Commentary

Carnegie Politika

Are Russia-Japan Relations Really Warming Up?

The truth is that Japan’s government is seeking a degree of reengagement but at a vastly reduced level than under Abe. Most significantly, Japan has shown no willingness to ease sanctions.

James D.J. Brown

Commentary

Carnegie Politika

Brussels and Baku Are Talking Again: What Next?

Azerbaijan’s relations with the EU appear to be going from strength to strength after several years in the deep freeze following the military escalation in Karabakh in 2023 and Azerbaijan’s bitter fallout with France and several other EU member states.

Shujaat Ahmadzada

Commentary

Carnegie Politika

In Russia, Private Companies Have Been Left to Pick Up the Tab for Ukrainian Drone Attacks

The cost of air defense has become an unregistered tax on revenue for businesses. While military rents are consolidated in the federal budget, the costs of defense are being spread across the balance sheets of companies and regional governments.

Alexandra Prokopenko

Commentary

Carnegie Politika

As Trump Threatens to Quit NATO, the Baltic States Are Playing for Time

Governments in Estonia, Latvia, and Lithuania want to ensure that a U.S. military withdrawal would not leave them dangerously exposed to a Russian attack.

Sergejs Potapkins