John Williamson, one of the foremost academics on exchange rates, went back to basics and questioned the assumption that reserve currency status confers vast benefits.
Whereas China, Brazil and others have lambasted the United States for deliberately cheapening the dollar through loose monetary policies, Williamson argued that US exchange-rate flexibility is actually limited because the dollar is the anchor of the system. It is other countries that adjust their rates; the dollar then adjusts as a "residual".
Of course, the United States gets to finance its payments deficits more cheaply because of demand for dollars from reserve managers, but this might not be enough to outweigh the loss of freedom to manage its exchange rate.
"It is not surprising that many economists have therefore concluded that a reserve currency role is not advisable," said Williamson, a senior fellow at the Peterson Institute for International Economics in Washington.
He identified only two ways that US power in the world economy is enhanced by the dollar's dominant role, which he does not expect to be challenged in the next quarter century.
First, the $3.2 trillion in official reserves that China has accumulated in maintaining the yuan's semi-fixed peg to the dollar tie Beijing's policy hands. That is because any hostile gesture, such as a threat to shift out of dollars, would destroy Chinese wealth.
Second, because of the extensive private use of the dollar globally, the United States is better able to enforce a financial blockade, such as the one now directed against Iran.
"I have the impression that the additional national power which stems from commanding an international currency tends to be exaggerated by strategic thinkers," he wrote.