Mehrling Paper Explores Rise of the Global Dollar System
Perry Mehrling, Professor of International Political Economy at Boston University’s Frederick S. Pardee School of Global Studies, published a new paper with the Institute for New Economic Thinking on the global dollar system.
In his piece, titled “Exorbitant Privilege? On the Rise (and Rise) of the Global Dollar System,” Mehrling argues that the global dollar system remains dominant and the key currency approach remains in the minority. He proposes two main reasons why the key currency approach: the discredit of monetary optimism during the depression, and the subsequent fateful adoption of Walrasian equilibrium as the frame for academic discussion after WWII.
In an article on his paper, “The Rise of the Global Dollar System,” Mehrling argues the following:
Things are going to break (are in fact already breaking) and central banks are going to have to respond, but the mental frame that most people will be (are in fact) using is not well suited for understanding how the world now works, and the minority who do understand are in danger of being overwhelmed by sheer weight of numbers, not to mention entrenched authority.
Mehrling’s full paper can be read on the Institute for New Economic Thinking’s website.
Perry Mehrling is a Professor of International Political Economy at the Pardee School and teaches courses on the economics of money and banking, the history of money and finance, and international money. He is the author of The New Lombard Street: How the Fed became the dealer of last resort (Princeton 2011), Fischer Black and the Revolutionary Idea of Finance (Wiley 2005), and The Money Interest and the Public Interest (Harvard 1997). For more about Professor Mehrling, visit his Pardee School faculty profile or his personal website.