ABSTRACT
This chapter determines the specific requirements for a key currency. It analyzes the effects of the dollar's roles on the United States. The chapter examines the combination of criteria which would be both necessary and sufficient to maintain key currency status under different monetary arrangements. It explains that a country is likely to achieve economic and financial dominance only if it achieves political and military dominance, with the extent of the former. Most analyses of the attributes required of a key currency country have been purely economic. International economic involvement in turn increases the interest of the key currency country in maintaining as much political dominance as possible. A particular international system is usually based on the security considerations of the major powers, the primary focus of world politics. Economic and financial arrangements are derivative sub-systems. There is of course the possibility that the relative military and political power of the superpower may differ from its relative economic power.
