H. PETER GRAY is Professor Emeritus of International Economics and Business at Rutgers, the State University of New Jersey and at Rensselaer Polytechnic Institute of Troy, New York, USA. He is a past president of both the Eastern Economic Association and of the International Trade and Finance Association.

'Peter Gray presents a succinct story about the decline and fall of the U.S. dollar as a reserve currency, and the problems of developing an alternative arrangement that would facilitate international payments. Gray sketches the transition problem associated with the decline from a U.S. external payments position characterized by a current account deficit of six percent of GDP to a much smaller sustainable value.' - Robert Z. Aliber, Professor of International Economics and Finance Emeritus, Graduate School of Business, University of Chicago, USA 'In this study of the role of the US dollar within the global economic system, Peter Gray provides a masterly account, which should be of interest to academic economists and policy-makers alike. It is particularly timely to have such a thorough analysis of the logic of, and latest developments in, the international monetary system, whose reliance on one key currency creates such systemic problems.' - Sheila C. Dow, Department of Economics, University of Stirling, UK

• Preface to the Paperback Foreword; R.Canterbery PART I: INTRODUCTION The Purpose and Three Propositions PART II: HOW A HEGEMONIC SYSTEM WORKS Background Concepts and Relationships in a Globalized World A Theory of Balance-of-Payments Adjustment for the Hegemon A Model of Instability in Asset Markets PART III: EXHAUSTION: SOFT, HARD OR VERY HARD LANDING? The Data Assessing Propositions One and Two The Efficiency of Adjustment PART IV: CONFRONTING THE FUTURE Policy Options and Constraints The Transition Problem A Proposed Agenda for Redesign CONCLUDING ASSESSMENT The Grim Prospect Ahead The Implications of the Increasing U.S. International Dissaving in 2003 and 2004