Word: tradings
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Dates: during 1980-1989
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...less pressure on the dollar. Reason: the greenback has been declining because U.S. interest rates have lately been falling in comparison with those of West Germany and other countries. Moreover, lower interest rates could stimulate Germany's appetite for American products and thus help reduce the troublesome U.S. trade deficit...
...been less willing to fill what might be called the Micawber Gap, the expanding gulf between income and expenditure. Exports have fallen from $636 million in 1977 to an estimated $230 million this year. Imports have remained fairly constant at about $750 million a year. One result of the trade imbalance: Nicaragua's foreign debt has risen from $1.6 billion when the Sandinistas came to power to more than $6 billion. Moscow, in a move seen as signaling its concern over Nicaragua's growing inability to pay its way, has announced a cutback in oil deliveries of nearly...
...greenback must continue to fall, say many economists and now the Administration, if the U.S. is to curb its ruinous trade deficit. But no one can argue that such a strategy offers a simple and painless cure for America's economic ills. On the contrary, the perils are enormous and the effectiveness is uncertain. The immediate challenge for the Federal Reserve and the U.S. Treasury is to control the dollar's descent -- no easy feat -- and prevent a free fall, which would scare off foreign investors, drive up U.S. interest rates and perhaps cause another panic on Wall Street...
...textbook clear: if the dollar falls, the international prices of U.S. products drop, and foreigners will buy more of them. At the same time, foreign goods become more expensive in the U.S., and Americans will reduce demand for imports. A combination of the two trends will lower the trade deficit...
That, at least, is the theory. In practice, the mechanisms have been more complex and less effective. Since early 1985, the dollar has declined by about 50% against major currencies like the Japanese yen and the West German mark. Yet the U.S. trade deficit is as high as ever. Admittedly, it takes time for consumers and businesses to change their buying habits, and an improvement in the trade balance may be in the pipeline. But several forces are holding the deficit up. For one thing, foreign manufacturers have shown a dogged determination to hold down their U.S. prices to maintain...