Part 1: The US Dollar
There are several advantages for a nation to have its own currency. The biggest advantage is probably that having one's own currency allows a nation to print more money, which can help it to avoid debt default (Wood, 2011). This is tied to other issues of sovereignty, and especially fiscal and monetary sovereignty, where a nation can manage the value of its currency and use the currency as a means of influencing trade, and by extension the nation's economy (Wood, 2011).
In Europe, where most nations are on the Euro, the fact that these advantages do not exist became a critical issue during the recession of 2008-2009. Several smaller Eurozone nations faced high debt loads, but were unable to do anything about those debt loads. The reason is that the Eurozone economy as a whole is driven primarily by three large industrial nations – Germany, France and Italy. Those nations, Germany in particular, had fairly robust economies, such that the euro was relatively strong. Normally, a nation facing economic slowdown would seek remedy by seeking to reduce the value of its currency. Such a tactic would do two things – it would make it easier for the country in financial distress to pay its debt and avoid default, and it would allow its exports to be more competitive on the global market. In essence, some countries were able to do this in order to kickstart economic growth, along with other tactics, but the smaller Eurozone nations were not. The condition in those countries was one of acute fiscal distress with stagnant or shrinking GDP, high risk of debt default, but with high interest rates reflecting the overall strength of Europe – strength driven by Germany and other northern nations. The lack of what is known as devaluation liberty left many southern countries much less equipped to manage their economic crises (Seth, 2015).
The United States, by contrast, having its own currency, was able to hold interest rates lower for longer. Lower rates encouraged investment, and as such the US was able to exert more control over its economy, at least in terms of monetary policy. Where the countries in the Eurozone lack the flexibility to manage the value of their currencies, the US retains this ability. As such, the US has more sovereign control, and is not beholden to the economies or interests of other nations. Whatever policy the government and Federal Reserve wish to have with respect to the US...
References
Da Costa, P. (2017) Fed official: It's inevitable that a controversial policy will return in the next recession. Business Insider. Retrieved September 16, 2017 from http://www.businessinsider.com/fed-official-qe-is-inevitable-when-the-next-recession-hits-2017-5
Krugman, P. (2011) The economic failure of the Euro. NPR. Retrieved September 16, 2017 from http://www.npr.org/templates/transcript/transcript.php?storyId=133112932
Ruan, H. (2013) Impact of US quantitative easing policy on Chinese inflation. University of Victoria. Retrieved September 16, 2017 from https://www.uvic.ca/socialsciences/economics/assets/docs/honours/Ruan_Ryan.pdf
Seth, S. (2015). What are the advantages of not adopting the Euro? Investopedia. Retrieved September 16, 2017 from http://www.investopedia.com/articles/investing/043015/what-are-advantages-not-adopting-euro.asp
Wood, R. (2011) US blessed to have its own currency. Financial Times. Retrieved September 16, 2017 from http://www.ft.com/cms/s/0/e05d9cd6-b651-11e0-8bed-00144feabdc0.html?ft_site=falcon&desktop=true
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