Our Dollar, Your Problem: An Insider's View of Seven Turbulent Decades of Global Finance, and the Road Ahead

"Ken Rogoff—full disclosure, he’s my colleague—has been at the forefront of international macroeconomic research and policymaking for more than forty years. He’s written on debt, financial crises, exchange rates, capital flows—pretty much every major topic you could name in international macro. This book manages to pull all of that together in a way that’s genuinely readable and engaging, helped along by anecdotes from his own policymaking experience that both clarify the arguments and make them feel concrete and accessible to a much broader audience. There’s a clear throughline about how U.S. monetary and fiscal choices shape the global system, and how that system, in turn, constrains the United States. The explicit narrative is a warning. Rogoff argues that the era in which the dollar enjoyed unquestioned dominance alongside broad global stability may be fading, and that erosion could bring more frequent or severe crises—sovereign debt problems, inflationary episodes, and financial instability. But running alongside that is a quieter, almost contradictory story. The world has learned. Countries have more flexible exchange rates, larger reserves, less foreign-currency borrowing, and stronger monetary institutions than they did a generation ago. We also have new tools, like central bank swap lines, that didn’t exist in earlier crises. The fact that shocks like COVID did not trigger the kind of cascading emerging-market crises we saw in the 1980s or 1990s is not an accident. It reflects institutional learning. The book is most interesting where these two stories collide. Overall, the book is balanced and nuanced. I like the U.S. dollar as the global reserve currency as much as the next person. But I am not sure the advantages are quite as large as Rogoff claims. Some of the borrowing advantages the United States gets from it have diminished substantially over time. Moreover, I wanted to see more engagement with the counterargument that a strong dollar affects the U.S. economic structure, including manufacturing."