The US Dollar Hegemony in the 21st Century: Exploring the Persistence or Decline Components in the Framework of the International Monetary Regime

Abstract

The persistence or decline of US Dollar as a pervasive international currency has been one of the most important issues in the field of international political economy, since the beginning of the 21st century. While some scholars point to the continued dominance of US Dollar by citing the dominance of the United States in the world political and economic equations, others refer to the decline in the hegemony of this international currency due to the US economic weakness and its international alternatives. The present study aims to recognize the factors affecting the persistence or decline of US Dollar hegemony in the 21st century by using descriptive-analytical method based on considering available data and to examin the scenarios resulting from these situations. After raising this question that whether the hegemony of US Dollar as an international currency is still continuing or is facing a decline in the 21st century, this article is hypothesizing that despite the various factors affecting the continuation or decline of US Dollar hegemony, it seems that the continuity of US Dollar hegemony, as an international currency, will be strongly linked to the continuation of the existing international system and the US capability to keep it. The findings of this study in the framework of hegemonic stability theory show that the US Dollar hegemony will continue with some fluctuations depending on the willingness, volition and producing public goods by the United States in the short- and medium-term. However, in the long term, given the economic preponderance of China and other other emerging economies, a multi-currency monetary system may be formed in which the US Dollar would be a currency among other currencies.

Keywords

• us dollar
• international political economy
• hegemony
• hegemonic stability
• bretton woods