How Long the Strong Dollar

摘要: When the dollar started to depreciate at beginning of 2002, many pundits nodded: This was expected. After all, US current account deficit in 2000 and 2001 hovered around 4 percent GDP, and, based on second-quarter data, figure for 2002 headed 5 percent. For industrialized countries rule thumb is that a 4.5 GDP ‘‘danger point’’ home currency. On this basis, my 1999 book Is Trade Deficit Sustainable? suggested could widen another two three years. So, depreciating right schedule! But I prediction reasons? sustainability analysis best framework explaining depreciation so far year? Or there perspective has more salience dollar’s behavior considering its likely direction 2003? In essay outline views external conclude deficit-to-GDP analysis, although valuable tying down long-term trends currency, not important understanding or 2003. Rather, an framed global investor—rather