Even if a sovereign debt crisis is avoided, the public debt burden will negatively impact growth.
The dominant role of the U.S. dollar can be traced back to the end of World War II or even earlier to the interwar period when it gradually dethroned the British pound. Since the collapse of the Bretton Woods system in 1971 (in fact, this was a crisis of the U.S. currency), there has been continuous speculation about the imminent fall of the dollar in its global role. However, this has not happened yet despite numerous macroeconomic and financial shocks, including the global financial crisis in 2007–2009, and the mixed fortunes of the U.S. economy and politics. Most likely, the current crisis also will not undermine the dollar’s dominance, at least in the short-term.
The dollar’s resilience