An alternative perspective on global imbalances and international reserve currencies

The stability of the international reserve currency's purchasing power is less a question of what serves as that currency and more a question of the international adjustment mechanism, as well as the compatibility of export-led development strategies with international payment balances. According to Senior Scholar Jan Kregel, export-led growth and free capital flows are the real causes of sustained international imbalances. The only way out of this predicament is to shift to domestic demand-led development strategies - and capital flows will have to be part of the solution.