Second, public indebtedness has reached critical levels in many countries, giving rise to doubts about sustainability. Public finances are already facing huge challenges posed by rigid structural deficits and demographic developments, and the strains have been further aggravated by the transformation of private debt to public debt in rescuing financial institutions and by high expenditures to avert recession.
The paper by Jiakai Chen and Asani Sarkar, which is on today’s program, and our distinguished panelists on this topic this afternoon, will provide important insights on this issue. To summarize, I would like to stress the importance of the dollar to the U.S. and global economies and financial markets.