9/8/2015

Other People’s Dollars, and Their Place in Global Economics ­ The New York Times

http://nyti.ms/1N6VF74

The Opinion Pages

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OP­ED COLUMNI ST

Other People’s Dollars, and Their Place in
Global Economics
SEPT. 4, 2015

Paul Krugman

Sydney, Australia — Soon after arriving here, I stopped at an A.T.M.; I needed some dollars, and all I had were dollars.
O.K., weak joke. What I needed were Australian dollars — Aussies — not
U.S. greenbacks. There are actually four English­speaking countries with dollars of their own; the others are the Canadian loonie and the New Zealand kiwi. And you can learn a lot about the global economy, busting some popular monetary myths, by comparing those currencies and how they serve their economies. All four dollar nations are, if you take the long view, highly successful economies. True, America is still recovering from its worst slump since the
Great Depression, Canada is being hit hard by plunging oil prices and
Australia is feeling nervous as its markets in China wobble. But we’re all wealthy nations that have weathered economic storms better than most of the rest of the world.
While the dollar nations have all done well, however, they occupy very different positions in the world economy. In part, I mean that quite literally:

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9/8/2015

Other People’s Dollars, and Their Place in Global Economics ­ The New York Times

Australia and New Zealand are a long way from everyplace, while Canada, most of whose people live near its southern border, is effectively closer to the
United States than it is to itself. And the U.S. is, of course, an economic giant around whose gravity smaller economies revolve.
These differences in geographic