Is the US too big to fail?
AbstractWhy are investors rushing to purchase US government securities when the US is the epicentre of the financial crisis? This column attributes the paradox to key emerging market economies’ exchange practices, which require reserves most often invested in US government securities. America’s exorbitant privilege comes with a cost and a responsibility that US policy makers should bear in mind as they handle the crisis.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 12976.
Date of creation: 17 Nov 2008
Date of revision:
financial crisis; exchange rates; reserves; government;
Find related papers by JEL classification:
- F2 - International Economics - - International Factor Movements and International Business
- F3 - International Economics - - International Finance
- E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-31 (All new papers)
- NEP-CBA-2009-01-31 (Central Banking)
- NEP-MAC-2009-01-31 (Macroeconomics)
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