Will Donald Trump prove that Robert Triffin was right?

In the early 1960s, Robert Triffin theorised on the "curse of the reserve currency country". When a country has a reserve currency, it takes advantage of this fact to run up excessive debt; its savings rate becomes abnormally low, and its external debt becomes high. According to Robert Triffin, this reduces the quality of the country's currency, leading to a loss of its international reserve currency status. But until recently, this development could not be seen in the United States: despite the imbalances ( excessive domestic and external debt , insufficient savings , etc . ) , the dollar remained the dominant reserve currency. It is possible that Donald Trump ’s policies will finally prove that Triffin was right. His economic policies (fiscal stimulus at full employment) will increase other imbalances (protectionism, aggressive policies towards many countries) that may discourage international investors from lending to the United States. A decline in the dollar’s reserve currency status would force the United States to reduce its domestic demand to reduce its external borrowing requirement.