What should the United States do to increase global economic stability?
Global economic stability may be threatened: If the dollar loses its reserve currency role, with disorderly switches into other currencies and drastic exchange rate fluctuations, under the effect of the United States’ excessive financial imbalances; By the United States’ low potential growth, given the US share of the global economy. To reinforce the stability of the global econom y , the United States should therefore: Reduce its external deficit, which would require a more restrictive fiscal policy with tax hikes; Boost its potential growth, which is threatened by inequality and deficient infrastructure.