That’s the title of my keynote talk at the 27th INFER conference (Rome)an excellent exchange of ideas and comments on economics.
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My presentation was based on two papers (2024and more heavily on 2025) with Jeffrey Frankel and Hiro Ito. The slides are here.
The main conclusions.
- Gold and Currency holdings should be considered together
- The asset shares in aggregate holdings differ from the median central bank holdings
- The usual variables (exchange rate volatility) matter
- The sensitivity of dollar, gold holdings differ from those of other currencies
- Financial sanctions have an impact on asset holdings
- The Section 232 tariffs of 2018- did not significantly affect dollar holdings
- But the associated US trade policy uncertainty did
Jeffrey Frankel will be discussing some of our results in tomorrow’s AEI webinar “Is This the End of the US Dollar’s Exorbitant Privilege?” The panel includes Steven B. Kamin (AEI, formerly director, Int’l Finance Div, Fed), Maurice Obstfeld (Peterson Institute for International Economics, formerly Chief Econ. IMF), Nathan Sheets (Global Chief Economist, Citigroup).
