Will there be a dollar crisis?
Paul Krugman ()
Economic Policy, 2007, vol. 22, 435-467
"Almost everyone believes that the US current account deficit must eventually end, and that this end will involve dollar depreciation. However, many believe that this depreciation will take place gradually. This paper shows that any process of gradual dollar decline fast enough to prevent the accumulation of implausible levels of US external debt would impose capital losses on investors much larger than they currently expect. As a result, there will at some point have to be a 'Wile E. Coyote moment'- a point at which expectations are revised, and the dollar drops sharply. It is much less clear, however, whether this 'crisis' will produce macroeconomic problems." Copyright (c) CEPR, CES, MSH, 2007.
References: Add references at CitEc
Citations: View citations in EconPapers (39) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0327.2007.00183.x link to full text (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:ecpoli:v:22:y:2007:i::p:435-467
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0266-4658
Access Statistics for this article
Economic Policy is currently edited by Giuseppe Bertola, Philippe Martin and Paul Seabright
More articles in Economic Policy from CEPR Contact information at EDIRC., CES Contact information at EDIRC., MSH Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().