US

Dollar Dominance

Question A:

Use of the renminbi in world trade, as a reserve currency, and/or for foreign bond denomination is likely to increase substantially relative to the dollar over the next ten years.

Responses weighted by each expert's confidence

Question B:

Ceteris paribus, a shift to a more multi-polar international monetary system would have substantial negative implications for the US economy.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
2
Bio/Vote History
I would guess that this would depend on Chinese institutions. So long as they remain highly authoritarian and blur the line between the state and the Communist Party, the renminbi will remain less attractive as an international currency than the dollar.
Altonji
Joseph Altonji
Yale
Agree
3
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Disagree
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Uncertain
4
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
1
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Disagree
8
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
3
Bio/Vote History
Cutler
David Cutler
Harvard
Agree
2
Bio/Vote History
Deaton
Angus Deaton
Princeton
Uncertain
1
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Uncertain
10
Bio/Vote History
Geopolitical polarization of global payments could increase or decrease the RMB share, which has been near 2% for the last decade, with fluctuations but no notable trend.
-see background information here
Edlin
Aaron Edlin
Berkeley
Agree
1
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Einav
Liran Einav
Stanford
Uncertain
1
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT Did Not Answer Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
6
Bio/Vote History
It is hard and takes time to establish a new reserve currency. And the strong anti-China sentiment in many parts of the world makes the renminbi an unlikely candidate.
Greenstone
Michael Greenstone
University of Chicago
Agree
2
Bio/Vote History
Hall
Robert Hall
Stanford
No Opinion
Bio/Vote History
Hart
Oliver Hart
Harvard
Disagree
5
Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
5
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Uncertain
10
Bio/Vote History
Hoynes
Hilary Hoynes
Berkeley
No Opinion
Bio/Vote History
Judd
Kenneth Judd
Stanford
Disagree
7
Bio/Vote History
Uncertainty about China's economic and political future makes the renminbi less safe than the dollar.
Kaplan
Steven Kaplan
Chicago Booth
Disagree
3
Bio/Vote History
Skeptical that many countries will want to trust China.
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
3
Bio/Vote History
If we compare RMB usage in 10 years my guess is that it will be higher, but not nearly enough to have overtaken the dollar (or to be close to overtaking the dollar), but plausibly enough higher to be described as "substantially" higher.
Klenow
Pete Klenow
Stanford
Uncertain
2
Bio/Vote History
Levin
Jonathan Levin
Stanford
Disagree
3
Bio/Vote History
Maskin
Eric Maskin
Harvard
Uncertain
4
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Uncertain
7
Bio/Vote History
Oils go either way depending on military conditions
Obstfeld
Maurice Obstfeld
Berkeley
Disagree
7
Bio/Vote History
Saez
Emmanuel Saez
Berkeley Did Not Answer Bio/Vote History
Samuelson
Larry Samuelson
Yale
Uncertain
1
Bio/Vote History
If the US acts foolishly, such as failing to raise the debt ceiling and defaulting on US debt, then people will turn to other currencies, including the renminbi. If the US acts responsibly, the position of the dollar as the primary reserve currency will be secure.
Scheinkman
José Scheinkman
Columbia University Did Not Answer Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Uncertain
5
Bio/Vote History
So much can happen in a decade.
Shapiro
Carl Shapiro
Berkeley
Uncertain
7
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Disagree
5
Bio/Vote History
Usage of RMB will increase from current levels (~3%), but it will not have a substantial effect on the international eminence of the USD
Stock
James Stock
Harvard
Disagree
2
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Udry
Christopher Udry
Northwestern
Agree
4
Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Agree
2
Bio/Vote History
Altonji
Joseph Altonji
Yale
Agree
2
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Disagree
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Banerjee
Abhijit Banerjee
MIT
Agree
4
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Uncertain
1
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Agree
8
Bio/Vote History
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale
Uncertain
3
Bio/Vote History
Cutler
David Cutler
Harvard
Uncertain
1
Bio/Vote History
Deaton
Angus Deaton
Princeton
Agree
6
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Strongly Agree
10
Bio/Vote History
The US economy has benefited from globalization and reliance on the dollar for payments, as a reserve currency, as an issuance currency, as a trade-invoice currency, and in the FX market as a vehicle currency. The economic benefits include lower and more stable financing costs.
Edlin
Aaron Edlin
Berkeley
Agree
4
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Disagree
5
Bio/Vote History
Einav
Liran Einav
Stanford
Agree
1
Bio/Vote History
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT Did Not Answer Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Uncertain
5
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
Agree
1
Bio/Vote History
Hall
Robert Hall
Stanford
Disagree
1
Bio/Vote History
Now that all suppliers pay interest on reserves, the advantage from has pretty much disappeared
Hart
Oliver Hart
Harvard
Agree
6
Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
5
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Agree
6
Bio/Vote History
Hoynes
Hilary Hoynes
Berkeley
No Opinion
Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
7
Bio/Vote History
It would be negative for the US, but it is not going to happen to any major extent. The dollar remains the safest currency and dollar-denominated bonds remain the safest investments in the world.
Kaplan
Steven Kaplan
Chicago Booth
Agree
3
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Disagree
5
Bio/Vote History
Dollar dominance is still the best forecast because there is no plausible alternative for a true alternative reserve currency.
Klenow
Pete Klenow
Stanford
Disagree
3
Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
4
Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
4
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Disagree
8
Bio/Vote History
Small level effect, trivial growth effect
Obstfeld
Maurice Obstfeld
Berkeley
Disagree
7
Bio/Vote History
Saez
Emmanuel Saez
Berkeley Did Not Answer Bio/Vote History
Samuelson
Larry Samuelson
Yale
Agree
8
Bio/Vote History
The dollar's position as premier reserve currency allows the US to extract significant resources from the rest of the world; losing this ability would have substantial negative implications.
Scheinkman
José Scheinkman
Columbia University Did Not Answer Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Uncertain
3
Bio/Vote History
Shapiro
Carl Shapiro
Berkeley
Strongly Agree
7
Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Disagree
3
Bio/Vote History
Factors that would end the dominance of the USD, such as a loss in confidence in its stability and in the creditworthiness of the US government, would have substantial negative implications for the US economy, but USD dominance does not confer a substantial advantage to the US.
Stock
James Stock
Harvard
Agree
4
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Udry
Christopher Udry
Northwestern
Uncertain
5
Bio/Vote History