Word: dollarization
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Dates: during 1980-1989
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...that gap would create jobs and boost the gross national product. Government figures released last week showed that the GNP grew at an annual rate of only 1.2% in the fourth quarter of 1985 and 2.3% during the year as a whole, the smallest increase since 1982. The weakening dollar will also reduce demands that Congress take protectionist action against imports...
...decline, though, has brought higher costs for foreign goods and overseas vacations. Sony recently raised prices by 5% on its entire line of color television sets because of the falling dollar. A 19-in., remote-control model, for example, now costs $630, vs. $600 in December. Prices of Japanese cars and machine tools have also risen by 5% since December. Last week the American subsidiary of West Germany's Mercedes-Benz added 5.8% to the sticker price of its autos. Pouilly-Fuisse, a popular white burgundy that sold in stores for about $12 in 1985, now goes for as much...
...cheaper currency is particularly welcome in the industrial Midwest, / where some companies have never fully recovered from the past recession. "The reaction here is very positive," says Stephen Newhouse, a spokesman for Caterpillar Tractor (1985 sales: $6.7 billion), which does some 50% of its business overseas. "A cheaper dollar certainly gives us immediate help in countries where we compete with Komatsu of Japan." American carmakers also are delighted because the declining dollar removes some of the $2,000-per-car cost advantage that Japanese auto firms have held in the U.S. Partly as a result, Chrysler Chairman Lee Iacocca announced...
Makers of high-technology goods are jubilant too. Last year U.S. imports of electronic equipment exceeded exports by $8.6 billion, and the falling dollar should help reduce that imbalance. Says Ralph Thomson, senior vice president of the American Electronics Association, which represents 2,700 manufacturers of everything from microchips to medical instruments: "Among the major barriers that we face in international trade, the strong dollar has been the primary one. When we see that situation changing, we say 'Bravo...
While a falling dollar may limit the bargains available to U.S. travelers who venture overseas, it should boost the domestic tourist industry. In Florida, which boasts attractions ranging from Disney World to Miami Beach, hoteliers and resort owners expect a hectic year. Arnold Keithlin, marketing vice president of the Sonesta Beach Hotel on Key Biscayne, met last month with European travel arrangers and came away beaming: "They were forecasting a 35%-to-45% increase in their use of tourist facilities here this summer because of the depreciation of the dollar. They are all very bullish, very optimistic...