Question A:
The US dollar's status as the dominant reserve currency substantially raises its value.
Responses
© 2025. Kent A. Clark Center for Global Markets.
21%
5%
0%
3%
8%
46%
18%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
4%
10%
61%
25%
Question B:
US-led policy interventions that discouraged central banks from holding US treasury securities would substantially diminish the dollar's reserve currency status.
Responses
© 2025. Kent A. Clark Center for Global Markets.
21%
5%
0%
3%
15%
38%
18%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
4%
12%
49%
35%
Question C:
US-led policy interventions that led to a sustained weakening in the dollar would substantially damage the US government's ability to finance its deficits.
Responses
© 2025. Kent A. Clark Center for Global Markets.
21%
3%
0%
5%
28%
36%
8%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
7%
29%
48%
16%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 John Campbell |
Harvard | Bio/Vote History | ||
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The dollar's reserve currency role allows the US to keep interest rates lower than they otherwise would be, but it is not clear whether it increases the value of the dollar.
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 John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
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Price depends on demand and supply. Demand for US gov't securities could raise the value of the dollar, or lower the rate US govt has to pay, if supply was limited. Or it allow US to once print money, send abroad, and run trade deficit. We did that. Flat supply, quantity not P.
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 Francesca Cornelli |
Northwestern Kellogg | Bio/Vote History | ||
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 Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
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 Wenxin Du |
HBS | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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The dollar is on one side of most FX trades. In trade finance, FX reserve management, debt issuance, and trade invoicing, the proportional use of dollars far exceed the US proportion of global GDP. There is extra demand to hold dollars for these purposes.
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 Janice Eberly |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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 Eugene Fama |
Chicago Booth | Bio/Vote History | ||
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 Xavier Gabaix |
Harvard | Bio/Vote History | ||
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High demand for the currency -> High currency value for a while
-see background information here |
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 Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
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 John Graham |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
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 Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
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The reserve currency status of the dollar should raise its value. International investors pay a convenience premium for dollar-denominated assets, in particular Treasury bonds. However, not clear it is "substantial".
-see background information here |
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 Harrison Hong |
Columbia | Did Not Answer | Bio/Vote History | |
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 Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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 Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
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 Andrew Lo |
MIT Sloan | Bio/Vote History | ||
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The benefits are obvious: being able to issue debt in a currency where you own the printing presses to the currency gives one enormous flexibility if that currency also happens to be in demand, which is the definition of a "reserve currency".
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 Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
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 Sydney Ludvigson |
NYU | Bio/Vote History | ||
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 Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
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 Gregor Matvos |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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 Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
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 Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
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 Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
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The value of any currency rests on the demand to use it to transact, so the value of the $ is greater when there is global as well as domestic demand, given the quantity outstanding. This transactions demand is also countercyclical, which further raises the value of the $.
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 Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
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 Thomas Philippon |
NYU Stern | Bio/Vote History | ||
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 Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
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 Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
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 Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
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 Amit Seru |
Stanford GSB | Bio/Vote History | ||
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 Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
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 Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
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 Jeremy Stein |
Harvard | Bio/Vote History | ||
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 Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
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 Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
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 Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
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 Toni Whited |
UMich Ross School | Bio/Vote History | ||
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
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This is likely true, although it is not yet clear whether other currencies such as the euro or renminbi are in a position to substitute for the dollar as a reserve currency.
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John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
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You don't have to hold a lot of dollars to use dollars in transactions. CB can hold eurodollars, other currencies and dollar swap, corporates, etc.
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Francesca Cornelli |
Northwestern Kellogg | Bio/Vote History | ||
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Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
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Wenxin Du |
HBS | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Countries at risk of sanctions would worry that their US Treasuries will be frozen, like Russia's were. For this reason, China has probably already reduced its substantial FX reserves held in Treasuries.
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Janice Eberly |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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Eugene Fama |
Chicago Booth | Bio/Vote History | ||
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Xavier Gabaix |
Harvard | Bio/Vote History | ||
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Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
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John Graham |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
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Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
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If the US Treasury convenience premium diminishes, this could undermine the dollar's status, but the degree of this is unclear. Importantly, there is currently no substitute for the dollar and US Treasuries. Not clear it will "substantially" diminish status.
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Harrison Hong |
Columbia | Did Not Answer | Bio/Vote History | |
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Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
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Andrew Lo |
MIT Sloan | Bio/Vote History | ||
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Again, this is obvious from the definition of a reserve currency.
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Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
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Sydney Ludvigson |
NYU | Bio/Vote History | ||
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Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
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A reserve currency is based on fiscal capacity of the borrower and confidence of the holder in the safety of the payoff. Tampering with the payoffs (restrictions to sell or buy, default, inflation, FX depreciation) by the issuer will substantial lower its reputation.
-see background information here -see background information here -see background information here |
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Gregor Matvos |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
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Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
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Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
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It depends what these policies are. They might be ineffective.
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Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
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Thomas Philippon |
NYU Stern | Bio/Vote History | ||
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Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
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Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
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Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
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Amit Seru |
Stanford GSB | Bio/Vote History | ||
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Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
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Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
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Jeremy Stein |
Harvard | Bio/Vote History | ||
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Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
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Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
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Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
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Toni Whited |
UMich Ross School | Bio/Vote History | ||
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Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
John Campbell |
Harvard | Bio/Vote History | ||
|
A reduction in demand for dollar short-term safe assets will likely force an increase in US interest rates which will have severe consequences for the US fiscal position.
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John Cochrane |
Hoover Institution Stanford | Bio/Vote History | ||
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How? Demand depends on expected return, not level of price. I guess the losses as the dollar weakens might cool demand if they're mighty behavioral. Or make the dollar more attractive betting on mean-reversion.
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Francesca Cornelli |
Northwestern Kellogg | Bio/Vote History | ||
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Douglas Diamond |
Chicago Booth | Bio/Vote History | ||
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Wenxin Du |
HBS | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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If a "sustained weakening" means a predictable path of lower and lower prices for the dollar over time, that would reduce the demand for Treasuries and therefore raise Treasury yields, meaning a higher cost for financing US deficits.
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Janice Eberly |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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Eugene Fama |
Chicago Booth | Bio/Vote History | ||
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||||
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Xavier Gabaix |
Harvard | Bio/Vote History | ||
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It all depends on the interventions. E.g. lower interest rates lower the dollar, but ease ability to finance the debt
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Itay Goldstein |
UPenn Wharton | Bio/Vote History | ||
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John Graham |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
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Campbell R. Harvey |
Duke Fuqua | Bio/Vote History | ||
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If a weaker (riskier) dollar undermines the convenience premium for US Treasuries, then it becomes costlier to finance fiscal deficits. It is not obvious this would "substantially" damage the ability to finance deficits. It will raise costs.
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Harrison Hong |
Columbia | Did Not Answer | Bio/Vote History | |
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Wei Jiang |
Emory Goizueta | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Perhaps if sustained for many years, but in the next few years this seems doubtful. The unsustainable fiscal path is more worrying
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Ralph Koijen |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Camelia Kuhnen |
UNC Kenan-Flagler | Bio/Vote History | ||
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Andrew Lo |
MIT Sloan | Bio/Vote History | ||
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By weakening the demand for our debt, the yield will have to increase in order to maintain our borrowing, which increases the cost of capital.
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Michelle Lowry |
Drexel LeBow | Bio/Vote History | ||
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Sydney Ludvigson |
NYU | Bio/Vote History | ||
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Matteo Maggiori |
Stanford GSB | Bio/Vote History | ||
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It depends on what investors believe the motivations of the borrower are, also on the existence of alternatives. If the depreciation is a side effect of other policies, ok. US went off Bretton Woods in 1973, but dollar remained central, probably due to lack of alternatives.
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Gregor Matvos |
Northwestern Kellogg | Did Not Answer | Bio/Vote History | |
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Tobias Moskowitz |
Yale School of Management | Bio/Vote History | ||
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Stefan Nagel |
Chicago Booth | Bio/Vote History | ||
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Jonathan Parker |
MIT Sloan | Bio/Vote History | ||
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Low interest rates that weaken the $would increase US competitiveness and make it easier to finance our debt (and cheaper to pay back relative to our assets abroad). Policies that cause economic decline leading to capital flight and a weak $would make our debt harder to finance.
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Christine Parlour |
Berkeley Haas | Bio/Vote History | ||
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Thomas Philippon |
NYU Stern | Bio/Vote History | ||
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Manju Puri |
Duke Fuqua | Did Not Answer | Bio/Vote History | |
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Michael R. Roberts |
UPenn Wharton | Bio/Vote History | ||
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Paola Sapienza |
Hoover Institution Stanford | Did Not Answer | Bio/Vote History | |
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Amit Seru |
Stanford GSB | Bio/Vote History | ||
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Robert Stambaugh |
UPenn Wharton | Bio/Vote History | ||
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Laura Starks |
UT Austin McCombs | Bio/Vote History | ||
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Jeremy Stein |
Harvard | Bio/Vote History | ||
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Johannes Stroebel |
NYU Stern | Did Not Answer | Bio/Vote History | |
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Sheridan Titman |
UT Austin McCombs | Bio/Vote History | ||
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Stijn Van Nieuwerburgh |
Columbia Business School | Bio/Vote History | ||
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Toni Whited |
UMich Ross School | Bio/Vote History | ||
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