This paper investigates the implications of international financial sanctions for the reserve currency status of the US dollar. We propose a simple model of a reserve currency, demonstrate how the anticipation of financial sanctions can weaken the dollar's status, and evaluate the welfare...

1. Introduction : the euro challenge seen from emerging markets -- 2. Reframing the euro vs. dollar debate -- 3. The material limits of the euro challenge to the dollar -- 4. The alternative of the euro and the negotiated status of the dollar -- 5. The euro's ideational challenge to the...