The Dollar in the Turmoil

Sophie Bereau, Agnès Bénassy-Quéré, Valérie Mignon

Research output: Contribution to journalArticle

Abstract

We study the impact of the global financial crisis on the equilibrium exchange rate of the US dollar. We first simulate the impact of the crisis on the US net foreign asset position. Then, we calculate the equilibrium value of the dollar according both to a BEER and to a FEER approach. We find the case for a strong, although temporary, depreciation of the dollar even more acute than before the crisis. This suggests that the strength of the dollar in late 2008 and early 2009 may be short-lived.
Original languageEnglish
Pages (from-to)427-436
Number of pages10
JournalJournal of the Japanese and International Economies
Volume23
Issue number4
DOIs
Publication statusPublished - 2009

Keywords

  • Equilibrium exchange rate
  • Global imbalancesCrisis
  • Valuation effects

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