Monday, July 27, 2009

Exorbitant Privilege, Update

The term Exorbitant Privilege:

The exorbitant privilege is a term coined in the 1960s by Valéry Giscard d'Estaing, then the French Minister of Finance. It is generally misattributed to Charles de Gaulle. It refers to the benefit the United States had in the US Dollar being the international reserve currency: the US would not face a balance of payments crisis, because it purchased imports in its own currency (“Exorbitant Privilege” Brad DeLong’s Website).

I initially found this term on Wikipedia, but when I looked at the reference I saw that it was none other than Professor Brad DeLong, who wrote the definition. I took his courses, Macroeconomic Theory and the American Economic History (Econ 101B, 113 at UC Berkeley, respectively).

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