Tag: "exchange rates"

The Euro’s Dutch Disease

I’ve been aware of the phenomenon called the “Dutch disease” for a long time, but that label is fairly new to me. According to Wikipedia, the term was coined in 1977 by The Economist “to describe the decline of the manufacturing sector in The Netherlands after the discovery of a large natural gas field in […]

The Greek Tragedy and Pegged Exchange Rates

I continue to be surprised at how many arcane concepts I learned in school turn out to be true and relevant. The example I have in mind now is my study of the international adjustment mechanisms under fixed and floating exchange rates. The conclusion I took away from that study was that “fundamentally” or “ideally” […]

The Dollar: Beggar My Neighbor, or Myself?

The headline in today’s Wall Street Journal says “World Tries to Buck Up the Dollar.” The headline writer no doubt savored the opportunity to use “buck” for its double meaning even though it might have been more accurate to say “World Tries to Hold Down It’s Currencies.” That would have gotten closer to the world’s […]

Q: Will Helicopter Ben Support the Dollar?

A: No, Not directly, but Yes Indirectly.   Channeling the FOMC I remember once when the head of the trading desk at the New York Fed was giving his report on international operations, the FOMC broke into applause when he announced that there had been no dollar intervention during the past year. While fixed exchange […]