There’s a serious imbalance at the heart of the world economy. Even though the output of the U.S. has shrunk as a share of world gross domestic product, the U.S. currency remains as essential as ever. The dollar is actually more important than it deserves to be, because of a network effect: People use dollars because other people use dollars, just the way people learn English because the people they have to deal with speak English.
The main harm is to less developed countries whose economies are discombobulated by fluctuations in U.S. interest rates and the value of the dollar. This was discussed in an important paper delivered at the recent monetary policy conference in Jackson Hole, Wyo., by Mark Carney, governor of the Bank of England, who warned against “blithe acceptance of the status quo.” Here’s a link.