The Economics of the Dollar Cycle

The Economics of the Dollar Cycle

by Stefan Gerlach
     
 

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The paradoxical behavior of the dollar since 1980 poses a challenge to standard models of open economy macroeconomics. Using the dollar as a fulcrum, the original essays in this book discuss the causes of the dramatic shifts in the dollar's exchange value during the past decade and the effect of these fluctuations on the economies of the United States, Japan, Europe,

Overview

The paradoxical behavior of the dollar since 1980 poses a challenge to standard models of open economy macroeconomics. Using the dollar as a fulcrum, the original essays in this book discuss the causes of the dramatic shifts in the dollar's exchange value during the past decade and the effect of these fluctuations on the economies of the United States, Japan, Europe, and the developing nations, as well as its impact on theories of international economics.

Stefan Gerlach and Peter Petri address the causes of the dollar's extreme rise and sudden fall in the 1980s and speculate on how the cycle changed theories of trade, exchange rate determination, and international capital markets. James Tobin's debunking of myths about the dollar has important implications for the future course of U.S. economic policy, while Rachel McCulloch provides an overview of the remarkable events of the past decade. Paul Krugman points out how the experience highlights the bankruptcy of current theories of integration of goods and financial markets. Peter Garber urges caution in interpreting the fluctuations in the dollar as due to a speculative bubble. Several contributors offer exciting new ideas to be formalized and tested. These include structural breaks, asymmetries, and ratchets, addressed by Richard Baldwin and Charles Kindleberger, and the corporate response to the dollar, analyzed by Robert Aliber and by Ruyhei Wakasugi. Charles Wyplosz discusses the impact of the dollar on Europe, and Stefen Gerlach reviews the relationship between the dollar and its fundamentals. In the book's final essay, Peter Petri describes the impacts of the dollar cycle on the developing countries.

Stefan Gerlach isAssistant Professor of Economics in the Lemberg Program in International Economics and Finance at Brandeis University.

Peter A. Petri is Professor of Economics at Brandeis, Director of the Lemberg Program, and consultant to the World Bank

Editorial Reviews

Booknews
This first volume in this new series covers physiological adaptations of domestic and wild animals to the harsh desert environment in a comparative manner, describing the different mechanisms adopted by animals to overcome the stresses and stains imposed by heat and aridity. Using the dollar as a fulcrum, twelve original essays discuss the causes of the dramatic shifts in the dollar's exchange value during the past decade and the effect of these fluctuations on the economies of the US, Japan, Europe, and the developing nations, as well as the impact on theories of international economics. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Product Details

ISBN-13:
9780262071246
Publisher:
MIT Press
Publication date:
09/18/1990
Pages:
394
Product dimensions:
6.35(w) x 9.34(h) x 1.11(d)

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