Interview with Gita Gopinath: Trade and Currencies

Tyler Cowen serves up the questions in “Gita Gopinath on Trade, Currencies, and Economic Transformation” (Conversations with Tyler, September 25, 2026). Gopinath has just returned to Harvard after a stint at the IMF, and as usual is full of interesting and wide-ranging commentary. Here are a few of the many remarks that caught my eye: Because world trade is mostly conducted and invoiced in US dollar, not just in the US but everywhere, changes in US dollar exchange rates have a muted effect on levels of imports and exports. The value-added component of trade has declined over time, and because of the dollar’s dominant role in the trading system, everybody is pricing their goods to each other in dollars. In a way, the way you want to think about it is that when China is exporting some certain goods to the rest of the world, if its imports are priced also in dollars, then those inputs that are going into its production function are priced in dollars and sticky in dollars, then you have…