Daily Archives: November 13, 2009

From the FT:
Simple truths about the economy – Samuel Brittan
Ethics alone will not prevent financial crises – Philip Booth

From Elsewhere:
Politico does Economic Analysis – Econbrowser
Paul Krugman: Free lo Lose – Economist’s View
Tim Geithner, double talker – Free exchange
Asia and the IMF: Toward a deeper engagement - IMFDirect
Krugman on the Need for Jobs Policies – Naked Capitalism Read more

By Paul De Grauwe

The recent decline of the dollar against major currencies such as the euro and the Japanese yen has been spectacular. Even more spectacular, but often forgotten, is the long run decline of the dollar against the major currencies in the world. Since 1960 the dollar lost two thirds of its value against the Japanese yen, the Swiss franc and the German mark (since 1999 the euro).

The long-term decline of the dollar appears to be quite surprising especially considering that at least since the early 1990s the US has been seen to produce superior economic results, ie a higher productivity growth than most of Europe and Japan with more or less the same rates of inflation. Yet despite the appearance of superior economic performance the dollar has gone on losing value against currencies of countries deemed to have an inferior economic system. Where does this paradox come from? Read more