Up to 60 percent of global transactions are conducted in U.S. dollars, more than one-third of world economic output is produced in dollar bloc economies, and an even greater share of global assets are priced in the currency, or linked currencies. This role as the de facto global currency for more than six decades has made the Federal Reserve’s monetary policy one of the U.S.’s greatest exports. As we have observed recently in southern Europe, or in Asia during the 1997 financial crisis, importing monetary policy can be dangerous. It is surprising then that the Fed’s dominance hasn’t caused even deeper problems over ... (full story)