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Explaining the Dominant Currency Paradigm

Geoff Riley

28th May 2017

The dominant currency paradigm is about the fact that the US dollar matters a huge amount in setting the prices at which trade takes place in the global economy.

Explaining the Dominant Currency Paradigm

Nominal exchange rates have always been at the center of fierce economic and political debates on spillovers, currency wars, and competitiveness. It is easy to understand why: in the presence of price rigidities, nominal exchange rate fluctuations are associated with fluctuations in relative prices and therefore have consequences for real variables such as the trade balance, consumption, and output

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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