Dollars, debt, and dependence: the case for international monetary reform

Proposals for dollarization and for expanding currency blocs implicitly acknowledge that the international monetary system is deeply flawed. The ongoing failures of fixed, floating, and pegged exchange rate regimes and currency boards are signaling that it is the currency regime itself that is collapsing. This paper argues that the current dollar-based system requires policies that favor export-led growth and describes how that paradigm affects the global and U.S. economies. It calls attention to the instability inherent in competing currency blocs, analyzes previous reform efforts, and concludes with an alternative proposal to reinstate public management of the international payments system.