Unless the trade deficit shrinks, the combination of the trade deficit and the interest and dividend payments to foreigners will grow ever more rapid….

In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflat….

Domestic inflation reflects domestic monetary policy..

After all, an overvalued dollar gives us the ability to buy foreign goods at lower prices. And the existing volume of exports brings more yen and eur….

But the primary reason for wanting the dollar to become more competitive in the near future is that we may need an increase in exports this year and ….

But because we in the United States finance our current account deficit by borrowing in our own currency, we can move to a more competitive dollar wi….

To finance this trade deficit, the U.S. has to borrow from the rest of the world or sell American assets like stocks, businesses, and real estate to ….

But then in April of 1985 the dollar began a sharp decline. The dollar's trade weighted value fell 23 percent in just 12 months and by a total of 37 ….

First, I think the science of monetary economics has clearly gotten better..

The good news is that a competitive dollar in the global market and a strong dollar at home are compatible in both the long run and during the transi….

An increase in the relative price of products from the low wage manufacturers in Asia and Latin America will also make those products less attractive….

So just as I want pilots on the planes that I fly, when it comes to monetary policy, I want to think that there is someone with sound judgement at th….

The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit..

Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd ….

Thirty years ago, many economists argued that inflation was a kind of minor inconvenience and that the cost of reducing inflation was too high a pric….

The more competitive value of the dollar turned around the trade deficit..

Even if the dollar does decline during the coming months, the delays in the response of exports and imports to the more competitive dollar will mean ….

Inflation is lower and more stable and the real business cycle fluctuations are more modest..

A second reason why science cannot replace judgement is the behavior of financial markets..

We pay some price when necessary to bring down inflation but that price is temporary and is not large relative to the permanent gain from reduced inf….

Although economists have studied the sensitivity of import and export volumes to changes in the exchange rate, there is still much uncertainty about ….