Ezra Klein

They think that having dollar dominance has made our dollar too expensive, which has hurt manufacturing, even if it's meant cheap consumer goods. And they think that it's given us leverage. that all these idiots who came before them just haven't used, but they're going to use it. Ken Rogoff is the former chief economist at the International Monetary Fund.

They think that having dollar dominance has made our dollar too expensive, which has hurt manufacturing, even if it's meant cheap consumer goods. And they think that it's given us leverage. that all these idiots who came before them just haven't used, but they're going to use it. Ken Rogoff is the former chief economist at the International Monetary Fund.

He's a professor of economics at Harvard, and he has a new book coming out, very well-timed. It drops on May 6th, called Our Dollar, Your Problem, which is a history of dollar dominance, a history of how we built it, a history of the challenges to it, and a warning written before the Trump administration that the rest of the world was already beginning to look for exits from it.

He's a professor of economics at Harvard, and he has a new book coming out, very well-timed. It drops on May 6th, called Our Dollar, Your Problem, which is a history of dollar dominance, a history of how we built it, a history of the challenges to it, and a warning written before the Trump administration that the rest of the world was already beginning to look for exits from it.

But now the Trump administration has taken the stress that system was under and begun to put true cracks in it. Rogoff doesn't think we're going to be able to unring that bell.

But now the Trump administration has taken the stress that system was under and begun to put true cracks in it. Rogoff doesn't think we're going to be able to unring that bell.

But even bigger than that, the possibility that when you bring together our debt, now pressure on the dollar, Trump's behavior, that these things together could create a genuine financial crisis, a debt crisis, an inflationary crisis. He thinks we are way underrating the risk of it. As always, my email, EzraKleinShow at NYTimes.com. Ken Rogoff, welcome to the show. Thank you for having me, Ezra.

But even bigger than that, the possibility that when you bring together our debt, now pressure on the dollar, Trump's behavior, that these things together could create a genuine financial crisis, a debt crisis, an inflationary crisis. He thinks we are way underrating the risk of it. As always, my email, EzraKleinShow at NYTimes.com. Ken Rogoff, welcome to the show. Thank you for having me, Ezra.

So I want to get at the basics of how the dollar works in the international financial system. We sell dollars to other countries. Other countries buy them. Why?

So I want to get at the basics of how the dollar works in the international financial system. We sell dollars to other countries. Other countries buy them. Why?

And then we moved to it not being based on gold, it being based on trust in the United States and how we would manage the dollar.

And then we moved to it not being based on gold, it being based on trust in the United States and how we would manage the dollar.

But something you often run into when you start trying to study this or prep for conversations about it is the intensity of the demand for dollar-backed assets. And one thing other countries don't have is the depth of the assets we have to sell.

But something you often run into when you start trying to study this or prep for conversations about it is the intensity of the demand for dollar-backed assets. And one thing other countries don't have is the depth of the assets we have to sell.

And so it's not just that the dollar and dollar-backed assets like treasuries are, I think, though, I like the way you put it, are basically the lingua franca of international finance. It's also, there's enough of them to go around. There's just not as much liquidity in, you know, German currency back then.

And so it's not just that the dollar and dollar-backed assets like treasuries are, I think, though, I like the way you put it, are basically the lingua franca of international finance. It's also, there's enough of them to go around. There's just not as much liquidity in, you know, German currency back then.

What are the estimates of how much lower borrowing costs are, interest rates are in America, because the whole world is working off of our financial system?

What are the estimates of how much lower borrowing costs are, interest rates are in America, because the whole world is working off of our financial system?

So tell me about some of the other benefits. I mean, the dollar dominance, it gets called the exorbitant privilege. Your book is so interesting to read in this moment because it comes from the perspective of, that this is this huge privilege America has that the other countries in the world are growing tired of. And the question is, can we maintain it?

So tell me about some of the other benefits. I mean, the dollar dominance, it gets called the exorbitant privilege. Your book is so interesting to read in this moment because it comes from the perspective of, that this is this huge privilege America has that the other countries in the world are growing tired of. And the question is, can we maintain it?