The days of the US dollar as a global currency, with its overarching charisma as a brand to measure everything from hamburger prices to trade between remote nations could be on the wane, says Nobel-prize winning Joseph Stiglitz.
Stiglitz expects a new world reserve system to evolve at the next meeting of the G-20 group of the world’s leading economies.
“I am for a new global reserve system because money is moving in the wrong direction – from poor to rich countries. China and Russia pushed for a new reserve system at the last G-20 meeting but the United States did not agree to let the dollar be replaced,” Stiglitz said. “Hopefully, there will be a consensus on a departure from the dollar-dominated regime.”
Stiglitz, who won the Nobel in 2001, was in Guwahati to participate in a conversation with economist Lord Meghnad Desai on ‘Asia Rising: Implications for the World Economy’.
Stiglitz, a staunch critic of economic globalisation, feels a new global monetary order is imminent in view of the slide in the US economy and China’s emergence as a major economic power. The weakening of the euro was also a factor, he said.
Calming pessimists, Stiglitz said both China and India could expect stronger financial markets as they both had strong savings.
“Savings in the US is very low. People spend lavishly, and it is showing,”he said.