Thursday, March 14, 2013

John Carney — The Great Debate Over a Strong Dollar


Exports are a cost and imports are a benefit in real terms of trade.
We still want the stuff we send out to the rest of the world to be worth less than what we take from the rest of the world. If having a floating rate, nonconvertible fiat currency that is used as a reserve currency by central banks around the world helps us accomplish this goal, that's a benefit not a cost.
You don't have to be a free market fundamentalist to see this point. Even if you think that it's important to preserve, say, manufacturing jobs in the United States, your argument doesn't have to turn on the balance of trade. But it is weird to see the side most associated with free markets, the gold standard folks, relying on this kind of thinking.
CNBC NetNet
The Great Debate Over a Strong Dollar
John Carney | Senior Editor

1 comment:

The Rombach Report said...

The US economy doesn't a strong dollar nor a weak dollar, but rather stable dollar that balances the interests of debtors vs. creditors.