Date of Award
Master of Arts
This research paper focuses on the future of the United States dollar as the world’s main reserve currency. Since the end of World War II, the international monetary system has undoubtedly been a dollar-based system, this despite the closing of the gold window in 1971 and rising U.S. debt since then. This paper aims to answer the questions of how reserve currency status gives a state power, why the dollar has remained the anchor of the world’s monetary system, the threat to the dollar’s status posed by rising U.S. debt, and possible alternatives to the dollar. A case study of the British pound is conducted in order to more closely examine the privilege given to a reserve currency issuer and how lessons from the rise and fall of the pound’s global status can be applied to the U.S.’s situation. Special drawing rights, the euro, and the Chinese renminbi are explored as possible future reserve currencies, with emphasis on the renminbi as the most serious challenger to the dollar. Finally, this paper looks at how greater diversification of global currency reserves may affect U.S. policymaking, and a 5-point prescription is offered in conclusion.
dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.
Thompson, Clinton, "Uncomfortable Convenience: The Future of the Dollar in the International Monetary System" (2013). Electronic Theses and Dissertations. 680.