Kenneth Rogoff, a Harvard academic and chess grandmaster, has released his latest book “Our Dollar, Your Problem”, which offers a lucid narrative of international economics since 1971. The book takes its title from John Connally’s famous quote about the dollar being “our problem” for other countries.
Rogoff, who has been a vocal advocate for fiscal responsibility and sound economic policies, argues that macroeconomic thinking has evolved over the years. He suggests that the old saw “the questions never change — just the answers” holds true, but new policy answers have emerged to address these questions.
One of Rogoff’s key arguments is that the dogmatic belief in neoliberalism and free markets has softened, and he believes that fiscal policy should be more nuanced. He also argues that views on fiscal policy have fluctuated over the years, from post-war Keynesian budget activism to austerity measures after the 2008 financial crisis.
Rogoff’s book offers hard econometric evidence to support his arguments, including a 1983 paper with Ed Meese that showed the real-world behavior of free-floating exchange rates did not fit textbook models. He also shares the consensus on the dollar’s international role but warns that the ongoing huge US budget deficit and debt build-up is the greatest threat to its importance.
The book has attracted attention due to the current public interest in the dollar’s role as global reserve currency, but Rogoff’s scope is much wider than that. He provides a comprehensive narrative of international economics over four decades, including his experiences as Chief Economist at the IMF and his views on key economic issues such as cryptocurrency, stable coins, and government debt.
Source: https://www.lowyinstitute.org/the-interpreter/debate/tariff-troubles-future-global-economy