Bucking the Buck

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"The book's central claim is that US financial sanctions generate political risk in the international currency system. Political risk is defined here as the potential for a political act to raise the expected costs of using a currency for cross-border transactions or as a store of value. Over time, the accumulation of political risk in the system creates incentives for governments to adopt anti-dollar policies to promote the use of currencies or assets other than the dollar for investment and cross-border transactions. Of course, anti-dollar policies may fail. Thus, on their own they do not imply that the dollar is playing a diminishing role in a country's international economic relations. They merely indicate that the government is attempting to bring about such a shift. When sanctions-induced anti-dollar policies do successfully reduce reliance on the dollar, it signifies de-dollarization-the intentional reduction of the dollar's role in a nation's cross-border economic activities. The book explores this argument with a series of empirical chapters that examine the first two decades of the twenty-first century, a period in which the United States steadily increased its use of financial sanctions against foreign adversaries and pariah states"-- Provided by publisher