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Today's global monetary and financial system, to a remarkable extent, continues to rely on the U.S. dollar for international liquidity. This reflects the currency's historic role, the liquidity of American financial markets, and the absence of alternatives. But with the emergence of
emerging markets, the capacity of the United States to provide safe assets will be outstripped by the growth of international transactions. It is thus likely that other large economies, presumably Europe and China, will eventually join the United States as sources of international liquidity
and that other currencies will come to share the dollar's reservecurrency status.
The American Economic Review is a general-interest economics journal. The journal is published quarterly and contains articles on a broad range of topics. Established in 1911, the AER is among the nation's oldest and most respected scholarly journals in the economics profession.