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Exorbitant Privilege and Exorbitant Duty*

Gourinchas, P.O., Rey, H., Govillot, N.
  First Draft: 01 Aug 2010,

Abstract:
The center country of the International Monetary System enjoys an “exorbitant privilege” that significantly weakens its external constraint. In exchange for this “exorbitant privilege” we document that the US provides insurance to the rest of the world, especially in times of global stress. This is the “exorbitant duty”.



Citation:
Gourinchas, P. O., Rey, H., & Govillot, N. (2010). Exorbitant privilege and exorbitant duty (No. 10-E-20). Institute for Monetary and Economic Studies, Bank of Japan.
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*This material is based upon work supported by the European Research Council grant number 210584 on "Countries' external balance sheets, dynamics of international adjustment and capital flows"



*This material is based upon work supported by the European Research Council grant number 210584 on "Countries' external balance sheets, dynamics of international adjustment and capital flows"

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