Peterson Institute for International Economics

Closeup of the US dollar.

Photo Credit: Pixabay/Thomas Breher

Don't blame America's current account deficit on the dollar

Some US and Chinese officials wrongly argue that the dollar's status as the world's dominant reserve currency is the main driver of America's large and persistent current account deficits, writes Maurice Obstfeld. This theory misconstrues how international financial markets work.

View related event: International imbalances again? Still? Forever?

People gather after President Trump agreed to a two-week ceasefire with Iran, in Tehran. Picture taken on April 8, 2026.

WANA/Majid Asgaripour

Photo Credit: WANA/Majid Asgaripour

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Cullen S. Hendrix (PIIE)

April 8, 2026

Smoke rises after reported Iranian missile attacks in Doha, following the US and Israel strikes on Iran. Photo taken on March 1, 2026.

REUTERS/Mohammed Salem

Photo Credit: REUTERS/Mohammed Salem

RealTime Economics

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March 30, 2026

Tisza Party voters await the results of the parliamentary elections in Budapest, Hungary, on April 12, 2026.

NurPhoto/Marek Antoni Iwanczuk

Photo Credit: NurPhoto/Marek Antoni Iwanczuk

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Orbán's fall sends a warning signal to Argentina and Brazil

Monica de Bolle (PIIE)

April 16, 2026

A general view of the US Federal Reserve Marriner S. Eccles building, in Washington, DC. Picture taken on Monday, May 27, 2024.

Sipa USA/Graeme Sloan

Photo Credit: Sipa USA/Graeme Sloan

PIIE Briefings

Central bank independence in practice

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December 15, 2025

What's New

Olivier Blanchard

Olivier Blanchard on how Eurobonds could secure financing for Europe

Olivier Blanchard (PIIE)

April 16, 2026

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Monica de Bolle (PIIE)

April 16, 2026

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With less immigration, urban growth slowed in 2025

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April 16, 2026

The globe is depicted in this illustration.

Podcast: Global Imbalances Redux

Maurice Obstfeld (PIIE) interviewed by Tim Phillips

April 13, 2026

via VoxEU

PIIE Charts

War, uncertainty slow 2026 growth across advanced and emerging economies

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Karen Dynan (PIIE)

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Trump's tariff revenue tracker: How much is the US collecting? Which imports are hit?

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Gary Clyde Hufbauer (PIIE) and Ye Zhang (PIIE)

March 24, 2026

The Trump administration wants foreign investment pledges to boost several sectors that Biden targeted (featured)

The Trump administration wants foreign investment pledges to boost several sectors that Biden targeted

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February 11, 2026

Some countries will struggle to fulfill their investment pledges to President Trump

Some countries will struggle to fulfill their investment pledges to President Trump

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January 29, 2026

Decentering the dollar: A conversation

April 17, 2026, 9:00 AM to 10:00 AM EDT

Klaas Knot (PIIE; Former De Nederlandsche Bank; Former Financial Stability Board), Maurice Obstfeld (PIIE) and Adam S. Posen (PIIE)

Apr

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What Now, Europe?

Implementing the digital euro project

April 22, 2026, 9:00 AM to 10:00 AM EDT

Nicolas Véron (PIIE) and Piero Cipollone (European Central Bank)

Apr

22

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April 23, 2026, 11:00 AM to 11:30 AM EDT

Anjali V. Bhatt (PIIE) and Warwick J. McKibbin (PIIE; Australian National University)

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Featured Topics

US Federal Reserve

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January 2026

US Federal Reserve Chair Jerome Powell at the Federal Reserve in Washington, DC.

Trump’s Attack on the Fed Is Already Backfiring

Jason Furman (PIIE)

January 12, 2026

via New York Times

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Jason Furman (PIIE)

December 16, 2025

via New York Times

Tariffs

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US-China cooperative interdependence: Opportunities and obstacles

Marcus Noland (PIIE), editor

April 2026

A US flag flutters near shipping containers at the Port of Los Angeles in California, May 2025.

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Alan Wm. Wolff (PIIE)

April 8, 2026

Highwayman Trump disarmed but not defeated

Marcus Noland (PIIE)

March 23, 2026

via East Asia Forum

Inflation

Customer paying with cash in Washington, DC.

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Jason Furman (PIIE)

April 10, 2026

via New York Times

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Karen Dynan (PIIE)

April 9, 2026

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Karen Dynan (PIIE) and David Wilcox (PIIE), editors

February 2026

China

Chinese and US flags are displayed.

US-China cooperative interdependence: Opportunities and obstacles

Marcus Noland (PIIE), editor

April 2026

A visitor places her hands on a "Tangible Earth" at an exhibition pavilion on Japan's northern island of Hokkaido. July 6, 2008.

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Gary Clyde Hufbauer (PIIE) and Ye Zhang (PIIE)

March 31, 2026

Smoke rises after reported Iranian missile attacks in Doha, following the US and Israel strikes on Iran. Photo taken on March 1, 2026.

How Russia and China are winning the war in Iran

Elina Ribakova (PIIE) and Alicia García-Herrero (Bruegel; Hong Kong University of Science and Technology)

March 30, 2026

In The News

Maurice Obstfeld

The World's Anti-Recession Guardrails Are Weaker Than Ever

via Bloomberg

feat. Maurice Obstfeld

Jacob Funk Kirkegaard

Why Gulf Nations Would Bear the Brunt of Hormuz Tolls

via Wall Street Journal

feat. Jacob Funk Kirkegaard

Maurice Obstfeld

‘Can’t make a squeak’: Trump's fossil fuel push puts IMF, World Bank on defensive

via Politico

feat. Maurice Obstfeld

Elina Ribakova

As Iran War Pushes Up Oil Prices, Putin Can Barely Conceal a Smirk

via Wall Street Journal

feat. Elina Ribakova

Resources

Trump's tariff revenue tracker: How much is the US collecting? Which imports are hit?

PIIE Chart

Title
Trump's tariff revenue tracker: How much is the US collecting? Which imports are hit?

US-China Trade War Tariffs: An Up-to-Date Chart

PIIE Chart

Title
US-China Trade War Tariffs: An Up-to-Date Chart

Trump's trade war timeline 2.0: An up-to-date guide (featured)

RealTime Economics

Title
Trump's trade war timeline 2.0: An up-to-date guide

Pixel-Shot/Adobe Stock/stock.adobe.com

Microsite

Title
The future of the USMCA

What Is Globalization?

Microsite

Title
What Is Globalization?

Globalization has helped raise incomes almost everywhere since the 1980s

PIIE Chart

Title
Globalization has helped raise incomes almost everywhere since the 1980s