but what actually makes a currency a reserve currency in the first place? isn't it more about military might and relevance in global economy?
"city-states could handle the exorbitant privilege better," i get the logic that there's no industry to hollow out, but isn't it more about geopolitics?
I think whether a currency becomes a reserve currency depends on whether states use it for their reserves. And while military might may be helpful in establishing characteristics that make the currency more attractive, I think it's clear it's not a necessary condition. Gold has no military backing but it's used as reserves everywhere.
but what actually makes a currency a reserve currency in the first place? isn't it more about military might and relevance in global economy?
"city-states could handle the exorbitant privilege better," i get the logic that there's no industry to hollow out, but isn't it more about geopolitics?
I think whether a currency becomes a reserve currency depends on whether states use it for their reserves. And while military might may be helpful in establishing characteristics that make the currency more attractive, I think it's clear it's not a necessary condition. Gold has no military backing but it's used as reserves everywhere.