The Costs and Benefits of the U.S. Role as a Reserve Currency Country

Introduction, 442. — I. Benefits of the U.S. reserve currency role, 445; the flexibility advantage, 445; the income advantage, 446. — II. The costs of the U.S. reserve currency role, 447; the constraint on independent domestic policies, 447; the devaluation constraint, 450; the burden of supplying reserves to other countries, 452; the burden of managing private gold markets, 454. — III. Conclusion, 454.