Harvard Professor and former IMF First Deputy Managing Director Gita Gopinath has strongly rebuked the enduring economic narrative that the U.S. dollar’s status as a global reserve currency is to blame for America’s persistent current account deficits.
A ‘Terribly Flawed’ View
In a recent post on X, Gopinath threw her weight behind a Peterson Institute for International Economics (PIIE) article by Maurice Obstfeld titled “Don’t blame America’s current account deficit on the dollar.”
Reiterating her previous stance, Gopinath wrote, “The view that the dollar’s reserve currency status is responsible for its deficits is a terribly flawed view.”
Expressing clear frustration at the theory’s mainstream persistence despite evidence to the contrary, she added, “Yet, like a zombie, this view will not die even if, as Maury says This notion is dead wrong.”
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This post was originally published here
