The Executive Summary of

Our Dollar, Your Problem

by Kenneth Rogoff

Summary Overview:

For decades, the U.S. dollar has served as the undisputed backbone of the global financial system—the dominant reserve currency, the default medium for trade, and the safe haven in times of crisis. Our Dollar, Your Problem confronts a growing and uncomfortable question: what happens to the world—and to the United States—when that dominance is no longer absolute? Kenneth Rogoff argues that the era of effortless dollar supremacy is entering a more fragile, contested phase.

This book matters because currency power is not an abstract monetary issue—it is a geopolitical, economic, and strategic force. Dollar dominance shapes interest rates, sanctions power, global capital flows, and crisis management. For policymakers, central bankers, investors, sovereign funds, and global executives, Our Dollar, Your Problem provides a sober, historically grounded framework for understanding how financial power shifts gradually, painfully, and often unexpectedly. It is a warning against complacency and a guide to navigating a world of monetary fragmentation and rising systemic risk.

About The Author

Kenneth Rogoff is one of the world’s most respected macroeconomists, a professor at Harvard University, and former Chief Economist of the International Monetary Fund (IMF). He has advised governments and central banks across advanced and emerging economies.

Rogoff’s authority comes from a rare combination of academic rigor, policy experience, and historical depth. He has studied financial crises, debt cycles, inflation, and currency regimes for decades—making his perspective uniquely suited to analyze the long arc of monetary power and its political consequences.

Core Idea:

At the heart of Our Dollar, Your Problem lies a clear and unsettling insight:

The U.S. dollar will not collapse suddenly—but its dominance will erode in ways that reshape global finance, geopolitics, and economic stability.

Rogoff argues that reserve currency dominance is never permanent. History shows that leading currencies—such as the British pound—lose influence not through dramatic collapse, but through gradual diversification, policy mistakes, geopolitical shifts, and institutional decay. The dollar’s position remains strong, but it is increasingly strained by debt, political polarization, weaponization of finance, and the rise of alternative systems.

The central paradox of the book is captured in its title: the dollar’s dominance benefits the United States—but often creates instability, dependence, and vulnerability for everyone else.

Reserve currency status is not earned once, it must be continuously maintained.

Key Concepts:

Why the Dollar Dominates

The dollar’s global role rests on multiple reinforcing pillars:

The size and openness of the U.S. economy
Deep, liquid financial markets
Rule of law and contract enforcement
Military and geopolitical power
Network effects (everyone uses the dollar because everyone uses the dollar)

Reserve currency status is not earned once—it must be continuously maintained. Rogoff emphasizes that no single rival can easily replace the dollar—but many small shifts together can weaken it.

The “Exorbitant Privilege”—and Its Cost

Dollar dominance gives the United States extraordinary advantages:

Lower borrowing costs
Ability to run persistent deficits
Powerful financial sanctions
Crisis response flexibility

However, Rogoff highlights the hidden costs:

Chronic trade imbalances
Asset bubbles driven by global capital inflows
Political complacency around debt
Overconfidence in monetary immunity

What feels like privilege can quietly become dependence.

Weaponization of the Dollar

One of the book’s most urgent themes is the use of the dollar as a geopolitical weapon. Sanctions, financial exclusion, and payment restrictions have become central tools of foreign policy.

While effective in the short term, Rogoff warns that:

Excessive use incentivizes alternatives
Targeted countries accelerate de-dollarization
Neutral countries seek hedging mechanisms

This does not end dollar dominance—but it encourages fragmentation.

The Rise of Currency Multipolarity

Rather than a single replacement currency, Rogoff predicts a multipolar monetary world, where:

The euro plays a regional role
China’s renminbi expands cautiously
Smaller currencies gain niche influence
Digital currencies alter settlement systems

This fragmentation reduces efficiency but increases strategic optionality for nations seeking autonomy from U.S. financial influence.

Debt, Inflation, and Fiscal Stress

Rogoff places heavy emphasis on public debt dynamics. The United States carries historically high debt levels, and while inflation temporarily reduces real debt burdens, it:

Undermines credibility
Raises long-term interest rates
Encourages capital diversification

Reserve currencies fail slowly—then suddenly under stress. Fiscal discipline matters not because collapse is imminent, but because credibility erosion compounds quietly.

Financial Repression and Hidden Taxation

The book explores how governments manage high debt through:

Low or negative real interest rates
Capital controls
Regulatory pressure on banks and savers

These tools function as stealth taxes, redistributing wealth and suppressing alternatives. Rogoff argues that such practices can stabilize systems temporarily—but at the cost of trust and efficiency.

Emerging Markets: Living with “Our Dollar”

For emerging economies, the dollar creates persistent challenges:

Currency mismatches
Debt vulnerability
Capital flow volatility
Limited monetary sovereignty

Hence the title: Our Dollar, Your Problem. Dollar cycles driven by U.S. policy often destabilize economies with little control over the source of shocks.

Digital Currencies and the Future of Money

Rogoff treats cryptocurrencies and central bank digital currencies (CBDCs) with measured realism. While unlikely to dethrone the dollar directly, they:

Reduce transaction friction
Increase state surveillance potential
Enable alternative payment rails

Digital innovation accelerates monetary experimentation, but does not eliminate the need for institutional trust.

No Sudden Collapse—But No Free Pass

The book strongly rejects apocalyptic narratives of sudden dollar collapse. Instead, Rogoff emphasizes:

Gradual diversification
Higher borrowing costs over time
Reduced sanction effectiveness
More frequent financial instability

The danger is not replacement—it is erosion without preparation.

Reserve currencies fail slowly, then suddenly under stress.

Executive Insights:

Our Dollar, Your Problem reframes global finance as a system under slow structural stress, not imminent breakdown. For leaders, it demands a shift from binary thinking (dominant vs. replaced) to probabilistic risk management.

Strategic Implications for Leaders and Policymakers:

Currency dominance is a policy outcome, not a birthright
Weaponization accelerates diversification
Debt tolerance has limits—even for reserve issuers
Fragmentation raises systemic risk
Trust and institutions matter more than technology

Corporations and investors must adapt to a world where currency risk, capital controls, and political finance are structural features, not anomalies.

Actionable Takeaways:

The book offers practical guidance for navigating a shifting monetary order.

For Governments and Central Banks:

Preserve institutional credibility
Avoid overuse of financial sanctions
Strengthen fiscal discipline
Prepare for multipolar currency coordination
Balance innovation with trust

For Executives and Investors:

Diversify currency exposure
Stress-test funding and liquidity assumptions
Monitor political and monetary risk together
Plan for capital flow volatility
Understand that “safe assets” are conditional

For Emerging Economies:

Reduce dollar mismatches
Build local currency markets
Strengthen macroprudential defenses
Develop strategic optionality

Final Thoughts:

Our Dollar, Your Problem is neither alarmist nor complacent—it is strategically realistic. Kenneth Rogoff delivers a clear message: the dollar’s dominance will persist, but on less forgiving terms. The future belongs not to those who predict collapse, but to those who prepare for gradual change, rising complexity, and institutional stress.

In a fragmented world, monetary power endures only when credibility, restraint, and foresight travel together.

The ideas in this book go beyond theory, offering practical insights that shape real careers, leadership paths, and professional decisions. At IFFA, these principles are translated into executive courses, professional certifications, and curated learning events aligned with today’s industries and tomorrow’s demands. Discover more in our Courses.