Today, a Great Power’s arsenal extends well beyond the military, embracing soft power and also currency power. The dollar dominates the global economy, used in settling trade and investment deals but also held in reserve in vast quantities by central banks in case of a payments crisis. This demand for dollars keeps US borrowing costs lower than they otherwise would be, reinforcing the country’s economic power and helping to pay for the world’s strongest armed forces. This Adelphi sets out how the US has regularly deployed the power of the dollar to put pressure on foes such as Iran, as well as allies including the United Kingdom and Germany. Contributors, including Robert Zoellick, the former head of the World Bank, and John Williamson, a leading expert on currencies, assess how long the US will be able to maintain this ‘exorbitant privilege’ in tandem with a rising China. Beijing, sensing that the global crisis might herald the end of the dollar’s supremacy, is eager to gain monetary power by carving out an international role for its own currency, the renminbi. The book examines the obstacles China must first overcome in its quest and the strategic consequences if it succeeds.
Introduction, Alan Wheatley Chapter 1. The origins and use of currency power, Alan Wheatley Chapter 2. The pretenders to the dollar’s crown, Alan Wheatley Chapter 3. The dollar and US power, John Williamson Chapter 4. Financial blockades: reserve currencies as instruments of coercion, Giri Rajendran Chapter 5. Global trade and global currencies, Harsha Vardhana Singh Chapter 6. The renminbi’s rise and Chinese politics, Di Dongsheng Chapter 7. The new shape of Asia, Yuriko Koike Chapter 8. The international monetary system: past, present … and a possible future?, Robert B. Zoellick Conclusion, Alan Wheatley
The Adelphi series is The International Institute for Strategic Studies' flagship contribution to policy-relevant, original academic research.
Six books are published each year. They provide rigorous analysis of contemporary strategic and defence topics that is useful to politicians and diplomats, as well as academic researchers, foreign-affairs analysts, defence commentators and journalists.