How Nominal Foreign Currency Depreciation Against the U.S. Dollar Affects U.S. Wealth: Working Paper 2018-05

Dorian Carloni

No 53931, Working Papers from Congressional Budget Office

Abstract: Foreign currency depreciation against the U.S. dollar would affect the wealth holdings of U.S. residents in several ways. Specifically, I analyze the effects of a one-time large depreciation of 20 percent. If foreign currencies depreciated by 20 percent against the U.S. dollar, the value of U.S. holdings of foreign assets would decrease by an estimated $2,451 billion and the value of U.S. liabilities to foreigners by $168 billion (values are based on 2015 holdings and values). On net, the total worth of U.S. households would decrease by $2.3 trillion—a drop of 2.2 percent.

JEL-codes: D31 E21 F30 F31 (search for similar items in EconPapers)
Date: 2018-06-11
New Economics Papers: this item is included in nep-mac
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