Category Archives: exchange rates
The Recent Pound Plunge in Context: 50 Years of the Real Rate
The drop in the pound over the last week was dramatic. But even with the recovery in the currency’s value to pre-mini-budget levels, the pound has been on a downward trend for the past six years, in inflation adjusted terms.
Reserve Currency Status Is No Vaccination against Recklessness – UK Edition
…although it helps.
I never thought an advanced economy government could pursue stupider policies than that implemented under the Trump administration. Consider me corrected on this point – case in point, the United Kingdom in 2022.
Guest Contribution: “The Dollar Dazzles Once More”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. An earlier version appeared at Project Syndicate.
Guest Contribution: “U.S. Trade Deficits and Exchange Rates”
Today, we’re fortunate to have Willem Thorbecke, Senior Fellow at Japan’s Research Institute of Economy, Trade and Industry (RIETI) as a guest contributor. The views expressed represent those of the author himself, and do not necessarily represent those of RIETI, or any other institutions the author is affiliated with.
Is the Dollar Strong? Or Likely to Get Stronger?
Compared to a sample average, the inflation adjusted dollar is strong. It’s not clear what that means — namely because the (real) dollar is not statistically distinguishable from a unit root process. The dollar is also likely to get stronger, based on historical patterns.
“The Impacts of Crises on the Trilemma Configurations”
Excepting international reserves, trilemma configurations were durable through the global financial crisis. From Aizenman, Chinn and Ito (forthcoming Open Economies Review, 2022) (also NBER WP No. 30406).
First Annual FRB-NYFED Conference on the “International Roles of the U.S. Dollar”
That’s the title of a conference (June 16-17) I had the pleasure of participating in. The agenda is shown below (I have included links to the papers where publicly available, but they might not be to the most recent version; Online agenda). This conference went well beyond recounting the main features associated with the dollar’s role, presenting both new empirical work (some based on micro data) and new theoretical work — ranging from the dominant currency pricing in a New Keynesian model to an explanation for staged capital account liberalization for the Chinese bond market, against a backdrop of rapid developments in digital currencies/assets and financial sanctions.
The Demise of Dollar Dominance?
Composition of Central Bank Holdings, 1965-2021
Estimated and reported: