Nobel Prize laureate Thomas Sargent says the era of the US dollar as the world’s largest trade currency could come to an end, China Entrepreneur magazine reports.
The United States was a poor country after it was founded in the 18th century but its economy improved dramatically after it “imported” many highly educated academics and was willing to admit to policy mistakes and rectify them, Sargent said.
The US experience can provide China, which is currently undergoing a similar journey, with a lot of lessons during its own economic reform and development, he said.
The US dollar rapidly became the world’s top trade currency after the conclusion of World War II because wars have affected the US relatively less, allowing the country to maintain its balance of payments, Sargent noted, adding that predictions about the end of the US dollar era have been premature.
In the future, however, all national governments will take more precautions but will still allow the public to decide what trade currency they prefer to use. If they end up deciding to use a different currency like the Chinese yuan, then the era of the US dollar will effectively end, Sargent said.
Full article: US dollar era could end: Nobel laureate Thomas Sargent (Want China Times)