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1 posts on "strong dollar"
March 1, 2023

The Dollar’s Imperial Circle

Ozge Akinci, Gianluca Benigno, Serra Pelin, and Jonathan Turek

Decorative: Large dollar sign with circles around it superimposed over an image of a city and world map.

The importance of the U.S. dollar in the context of the international monetary system has been examined and studied extensively. In this post, we argue that the dollar is not only the dominant global currency but also a key variable affecting global economic conditions. We describe the mechanism through which the dollar acts as a procyclical force, generating what we dub the “Dollar’s Imperial Circle,” where swings in the dollar govern global macro developments. 

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Posted at 7:00 am in International Economics, Macroeconomics, Monetary Policy, Supply Chain | Permalink

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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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