Hale, David D.
June 1985
FE: The Magazine for Financial Executives;Jun1985, Vol. 1 Issue 6, p30
Trade Publication
The article highlights on the dilemmas faced by economic policy-makers in the United States. As a result of the dollar's unique status as reserve currency during the first two decades after World War II, the U.S. enjoyed an advantageous financial relationship with the rest of the world. The U.S. was able to accumulate foreign assets and pay for defense by exporting funds in excess of its trade surplus. Western governments have restored the dollar's financial supremacy, and temporarily eliminated balance of payments constraints on the American economy. But since, they have done it through market forces, rather than through an agreement to stabilize exchange rates, they have reversed the efforts of the 1970s to restore the commercial competitiveness of the dollar exchange rate.


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