I just finished reading this book – Exorbitant Privelege – by Prof Barry Eichengreen, leading econ historian.
The book is really good as it goes into history of American Dollar and what makes it the most preferred currency across the world. As it talks about US Dollar one gets a flavor of history of international monetary system and the politics behind it. I mean hardly anything matters more than politics.
The book is simply written for a layman and explains many important concepts and trivia. For instance I learnt that Dollar got its name from Joachimsthaler (see this as well), a coin used in much of Europe. The Brits on colonising used this coin as not enough Pounds were minted. Hence, these thalers circulated which later came to be called as Dollars.
The book is full of these characters which led to the role Dollar plays in world economy today. Exorbitant Privilege was a term given by French Finance Minister Valéry Giscard d’Estaing to the status of Dollar.
The book discusses many aspects of US economy which led to the Dollar becoming the reserve currency of the world. he also discusses what countries like China need to do to unsettle US from its position. There is this discussion on Euro and how it has squandered the chance (atleast for sometime now) to replace the Dollar or atleast compete with it.
Highly recommended.
