Summary of Exorbitant Privilege

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Rating

8 Overall

7 Importance

8 Innovation

7 Style


Recommendation

Professor Barry Eichengreen’s exploration of the dollar’s reserve currency role could be merely an interesting history of currencies and repositories of value – from wampum and whelk shells to credit default swaps – all mapped out from Bretton Woods to the Maastricht Treaty to China’s looming role and beyond. But Eichengreen accounts for more than history as he expertly guides readers through the maze of the international monetary system. getAbstract finds that unresolved issues in world markets give this exposition considerable contemporary bite. Eichengreen argues solidly that the threats to the dollar’s international reserve status are real enough, but says all signs are that the dollar will endure as the first among rivals, even if other regional kingpins arise. He seems to believe that, despite its various crises and challenges, the dollar will remain dominant – but, in the end, he ducks a definitive judgment and concludes that its fate is in American hands and not in those of the Chinese or other international competitors.

In this summary, you will learn

  • How the international financial system deals with crises,
  • How current rivals threaten the dollar’s global reserve currency status and
  • How to protect the US’s “exorbitant privilege.”
 

About the Author

Barry Eichengreen is a professor of economics and political science at the University of California, Berkeley, and the author of Financial Crises and What To Do About Them and The European Economy Since 1945.

 

Summary

Advantage: US
In a scene in The Counterfeiters, a German film set just after World War II, the main character turns up at a casino with a suitcase of money. It contains neither French francs nor German marks, but dollars. Move forward 50 years to the thriller City of Ghosts...

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