Nobel economist Paul Krugman takes a jab at Elon Musk and says dollar dominance isn't worth much to America.

• Paul Krugman said dollar dominance is overrated, and isn't worth more to America than "a fraction of 1% of its GDP."
• The Nobel Prize-winning economist criticized Elon Musk for being among those warning that the US is "weaponizing" the dollar.

Nobel Prize-winning economist Paul Krugman said that the dollar's dominance of global trade and investment flows is overrated, and isn't worth more to America than "a fraction of 1% of its GDP".

In an op-ed for the New York Times on Tuesday, Krugman once again attempted to quash fears that the greenback's leadership of global trade and investment flows is waning and could soon be threatened by other currencies like the Chinese yuan.

"Even if you believe that the dollar's dominance is in imminent danger — which you shouldn't — a look at what that dominance actually entails makes it clear that the importance of controlling the world's reserve currency is greatly overrated," he wrote.

"The point is that tugging on one or two strands of this web isn't likely to cause it to unravel. Even if some governments express a desire to see payments conducted in other currencies, it's not at all clear they can make that happen, since we're mostly talking about private-sector decisions. And even if they can make partial de-dollarization stick, all the other advantages of the dollar as a banking and borrowing currency will remain," he added.

Krugman advised it would be best to ignore all the "dollar doomers" out there and instead question what "hyping of a nonissue says about their own judgment."

He also criticized Tesla boss Elon Musk for being among those who are warning the US is "weaponizing" the dollar through financial sanctions - for example, against Russia - and that such measures are threatening to undermine the greenback's supremacy.

"Elon Musk is among those warning that weaponizing the dollar will destroy its reserve currency status, because of course he is," Krugman wrote, likely referring to a previous tweet from Musk who said that if a country weaponizes its currency enough times, others will stop using it.

But Krugman argued that fears of an end to dollar dominance are made to seem important because global currency issues naturally come across as "glamorous and mysterious", but in reality very little is really at stake in them.