Overview

This book critically analyzes the US dollar’s dominance as an international currency through an analysis of US dollar gross balance sheets in the shadow banking system at global, systematically important banks. It begins by drawing upon Minsky and Kindleberger’s financial fragility hypothesis, explaining how analysis of dynamics in balance sheet expansion helps to reveal the fundamentals of the dollar standard system. It then examines the dollar standard system in the 2000s and during the Global Financial Crisis (GFC) of 2007-09, showing how endogenous finance of the dollar drove said banks to overstretch their balance sheets. An analysis of the dollar standard system post-crisis suggests that US Treasury securities as universal collateral assets have acted as a bedrock for the present dollar standard system. Dollar Dominance will interest scholars and graduate students of international finance, monetary systems, money, and banking. It is also a useful resource for central bankers, financial regulators, and other finance industry professionals.

Full Product Details

9781041227878

Table of Contents

Reviews

“In the spirit of Minsky and Kindleberger, Tokunaga offers an original account of dollar dominance, highlighting its dynamic and crisis-prone nature. He locates its core in endogenous, collateral-driven shadow banking and balance-sheet dynamics, with United States Treasury securities serving as universal collateral. This distinctive agenda goes beyond available accounts. A must-read!” Hasan Cӧmert, Associate Professor at Economics at Trinity College, CT, USA “How has the dollar survived at the top of the international currency pyramid through decades of global financial turmoil? Is it destined to remain at the top indefinitely? Junji Tokunaga’s “Dollar Dominance: Fundamentals, Nature, and Present Structure” addresses these important questions with careful, painstaking and extremely clear analyses of the recent history and underlying structures of the international financial markets and their relationship with the US dollar. The book is remarkable in that it tackles enormously complex issues – such as the underlying “plumbing” of various financial markets - with great clarity and ease of exposition. I hope all my students read this excellent book. I know I will assign it to them.” Gerald Epstein, Professor of Economics and Co-Director Political Economy Research Institute (PERI), University of Massachusetts Amherst, USA “This book unravels an enigma as follows: What supports the US dollar hegemony in the last few decades of financialization in which all kinds of wealth present itself as ‘an immense amount of fictitious capital’?” Takuyoshi Takada, Emeritus Professor at Chuo University, Tokyo, Japan

“In the spirit of Minsky and Kindleberger, Tokunaga offers an original account of dollar dominance, highlighting its dynamic and crisis-prone nature. He locates its core in endogenous, collateral-driven shadow banking and balance-sheet dynamics, with United States Treasury securities serving as universal collateral. This distinctive agenda goes beyond available accounts. A must-read!” Hasan Cӧmert, Associate Professor of Economics at Trinity College, CT, USA “How has the dollar survived at the top of the international currency pyramid through decades of global financial turmoil? Is it destined to remain at the top indefinitely? Junji Tokunaga’s Dollar Dominance: Fundamentals, Nature, and Present Structure addresses these important questions with careful, painstaking, and extremely clear analyses of the recent history and underlying structures of the international financial markets and their relationship with the US dollar. The book is remarkable in that it tackles enormously complex issues–such as the underlying 'plumbing' of various financial markets–with great clarity and ease of exposition. I hope all my students read this excellent book. I know I will assign it to them.” Gerald Epstein, Professor of Economics and Co-Director of Political Economy Research Institute (PERI), University of Massachusetts Amherst, USA “This book unravels an enigma as follows: What supports the US dollar hegemony in the last few decades of financialization in which all kinds of wealth present itself as ‘an immense amount of fictitious capital’?” Takuyoshi Takada, Emeritus Professor at Chuo University, Tokyo, Japan

Author Information

Junji Tokunaga is a Professor at the Department of Economics, Dokkyo University, Saitama, Japan. His research focuses on the international monetary system.

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