TOKYO -- As the dollar is the world's reserve currency, the U.S. Federal Reserve's monetary policy, which it enacts to ensure domestic economic stability, greatly affects the world as well. Sometimes two goals -- ensuring the stability of the U.S. economy and providing a stable supply of liquidity to the rest of the world -- are at odds.
This "Triffin dilemma" is named after Belgium-born economist Robert Triffin, who pointed to the difficulty of reconciling these two goals in the 1960s, when the dollar's value was fixed against the price of gold.
