usa.chinadaily.com.cn
US Policies Risk Dollar's Global Primacy, Experts Warn
Experts at the Peterson Institute warn that US policies prioritizing unilateral power over multilateral cooperation are undermining the dollar's global primacy, potentially leading to a fragmented and less stable international monetary system, with significant economic consequences for both the US and the world.
- How are current US policies undermining the dollar's global primacy, and what are the immediate economic consequences?
- The US is risking the dollar's global dominance through policies that prioritize unilateral actions over multilateral cooperation, potentially leading to a fragmented international monetary system. Experts at the Peterson Institute for International Economics cited declining fiscal probity, questions about Federal Reserve independence, and reduced trade openness as weakening the dollar's foundation.
- What are the three key "exorbitant privileges" associated with the dollar's dominance, and how are current US policies threatening these advantages?
- This approach, characterized as 'economic coercion,' involves tools such as manipulating exchange rates, erecting trade barriers against China, and pressuring allies to finance US deficits. This undermines the dollar's three key advantages: lower borrowing costs, the ability to run a perpetual current account deficit, and safe haven status during crises.
- What are the potential long-term implications of a decline in the dollar's global dominance for the international monetary system and global economic stability?
- The shift away from multilateralism and towards economic coercion could lead to a multipolar monetary system with regional currencies like the renminbi, euro, and yen gaining prominence. This fragmentation could result in higher risk premiums for US debt, increased economic volatility, and a potential contraction of the US economy.
Cognitive Concepts
Framing Bias
The article frames the discussion around the potential risks and downsides of current US policies, giving significant weight to concerns about the dollar's future. While presenting expert opinions, the framing emphasizes negative consequences, potentially overshadowing potential benefits or alternative interpretations of the situation. The headline itself, while not explicitly biased, could be perceived as leading readers towards a negative conclusion.
Language Bias
The language used is generally neutral, but terms like "undermining," "risking," and "coercion" carry negative connotations. While these words accurately reflect the experts' opinions, using more neutral phrasing like "affecting," "potentially jeopardizing," and "influencing" could reduce the implicitly negative tone. Additionally, describing the potential decline of the dollar's dominance as "disintegrating" is a strong and arguably dramatic choice of words.
Bias by Omission
The article focuses heavily on the perspectives of experts at the Peterson Institute, potentially omitting other viewpoints on the dollar's future and the impact of US policies. While acknowledging space constraints is important, considering alternative analyses from economists with differing viewpoints would strengthen the article's objectivity. The article also lacks specific data to support some of the claims about economic consequences, such as the 1% reduction in US GDP due to tariffs.
False Dichotomy
The article doesn't explicitly present false dichotomies, but the framing of the discussion heavily implies a binary choice between maintaining the dollar's dominance and a fragmented monetary system. The nuances and potential for alternative scenarios, like a gradual shift in global currency usage, are less emphasized.
Sustainable Development Goals
The article highlights that current US policies risk undermining the dollar's global primacy, potentially leading to a more fragmented and less stable global monetary system. This could disproportionately impact developing countries and exacerbate existing inequalities by limiting their access to stable financial systems and resources.