JOSEPH E. STIGLITZ and MARK WEISBROT
In August 2021, the International Monetary Fund issued $209 billion to developing countries in the form of special drawing rights (the IMF’s reserve asset). SDRs are much like cash, because recipient governments can convert them to hard currency. As such, they are a highly effective tool, and the IMF can and should make greater use of them.
While the 2021 issuance helped billions of people around the world, hundreds of thousands of Americans also benefited – and would do so again. Exports of US goods and services to developing countries total around $1 trillion, and if these countries get an infusion of reserves, they will import even more.
This effect can be quite significant. An SDR distribution the size of the 2021 issuance would be expected to create about as many jobs in the United States in one year as the $740 billion Inflation Reduction Act did in its first year. We are talking, conservatively, about 111,000-191,000 new jobs, most of which would be in export-related areas such as manufacturing, transportation, and warehousing.
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