6  For emerging-market countries that had experienced high inflation, another aspect of globalization fostering currency competition is the large amount of physical dollars now present in these countries, which allows citizens to conduct transactions and store liquid wealth without holding the local currency.
Over one recent period, the fraction of U.S. currency estimated to be held in foreign countries rose dramatically, from less than one-fifth in 1980 to as much as two-thirds in the late 1990s, and today the total nominal amount is in the neighborhood of $ billion, or somewhat more than one-half (U.S. Department of the Treasury and others, 2006).