A master thesis from Aalborg University
Dollarhegemoniets Historiske Udvikling og Dertilhørende Eksorbitante Privilegier
[Dollar Hegemony's Historical Development and Accompanying Exorbitant Privileges]
Forfatter(e)
Semester
4. semester
Uddannelse
Udgivelsesår
2023
Afleveret
2023-06-01
Antal sider
49 pages
Abstract
This thesis investigates the economic motivation behind China and Russia’s recent negative comments about the dollar’s international hegemony and what advantages this dollar hegemony confers onto the United States. The thesis traces the origins of the dollar’s hegemony to the gold-backed Bretton Woods system. Using economic theory as well as historical and empirical evidence the thesis details the evolution, degeneration, and evolution of this system into Bretton Woods II as well as the ‘Exorbitant Privileges’ the US enjoyed during this system. From the end of Bretton Woods II are detailed several important historical events such as Stagflation, OPEC dollar denomination of oil sales, financialization and the Asian Financial Crisis which are then related to the dollars continuing hegemony beyond Bretton Woods, its effect on the US economy and the evolution of its accompanying privileges. The thesis concludes that dollar hegemony today bestows upon the US two interrelated privileges: the continuing ability to run both trade and public budget deficits without pressure to adjust, and deep control over international financial markets and foreign central bank reserve assets which empowers US sanctions. Both these tools have been leveraged by the US against Russia both directly and indirectly during the Ukraine Conflict and, due to mounting tensions, threaten to be leveraged against China in the future as well.
Emneord
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