Dealing in dollars

The globally diverse and sometimes emotional response to the U.S. dollar—love, hate, begrudging respect—can make it difficult to know where the currency really stands.

But Simon Johnson, Ronald A. Kurtz (1954) Professor of Entrepreneurship and Professor of Global Economics and Management at MIT Sloan, says the position of the dollar is something every business leader should be watching. “If the potential exists for a change in the dollar’s standing as the world’s dominant currency, you can gain a huge advantage if you understand when that shift will come and what factors will drive it.”

In White House Burning, Johnson and coauthor James Kwak trace the dollar’s current position back to the 1944 United Nations Monetary and Financial Conference at Bretton Woods, where the international monetary system was rebuilt around the dollar. The decision proved widely beneficial. For the next three decades, fixing exchange rates in terms of dollars discouraged trade wars based on currency devaluation, promoted global economic stability, and facilitated rapid expansion in global trade.

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System Dynamics: Rethinking the world one system at a time

You’re on the phone with a service provider waiting to complete a simple transaction, but you spend long minutes on hold between micro conversations with people who seem at a loss to help. You’re in a continuous loop of frustration and inaction, and you know there must be a better way.

No doubt there is. And one way of discovering it is through system dynamics (SD)—the analysis and redesign of any interdependent social, managerial, economic, or ecological system. System dynamics was a mid-century invention, the brainchild of MIT Sloan Professor Emeritus of Management Jay Forrester during the School’s earliest days, and the concept has gained legions of adherents over the decades.

System Dynamics at MIT Sloan
Nelson Repenning“When it comes to system dynamics,” says Professor of Management Science and Organization Studies Nelson Repenning, “MIT Sloan is both the birthplace and the current center of expertise. The toolset was invented here, and I think it’s fair to say that we continue to offer a depth, rigor, and variety of applications you can’t find anywhere else.”

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