Skip to content
Technology & Innovation

The Dollar’s Future

Harvard economics professor Martin Feldstein says the U.S. dollar will remain a strong reserve currency, but that our national debt makes the Euro a competitive alternative.
Sign up for the Smarter Faster newsletter
A weekly newsletter featuring the biggest ideas from the smartest people

“The major risk to the sustained role of the dollar is the large and growing US national debt. After varying between 25% and 50% of GDP for the past half-century, the recent budget deficits have caused the debt to reach 62% of GDP. The official non-partisan Congressional Budget Office predicts that the policies that now seem most likely could push the debt to 100% of GDP by the end of the decade. Foreign investors might therefore fear that future US administrations will be tempted to reduce the real value of that debt by allowing a higher inflation rate. But that is unlikely, given the Fed’s general anti-inflationary consensus and the very short average maturity—roughly four years—of the national debt.”

Sign up for the Smarter Faster newsletter
A weekly newsletter featuring the biggest ideas from the smartest people

Related

Up Next