Dollar power on the wane, new reserve system likely : Stiglitz

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.

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.

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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.

“Savings in the US is very low. People spend lavishly, and it is showing,”he said.