Finally, some central banks in the past engaged in policies that artificially altered the path of domestic prices in their effort to regulate their business cycles. If the monetary authority wanted more growth above trend, it lowered money-market interest rates by expanding the stock of money. Such policies were expected to bolster demand and encourage an acceleration of growth.
Any diminution of the reserve status of the dollar, should it occur, is likely to be readily absorbed by a far more flexible U.S. economy than existed in Britain immediately following World War II.