The Economic Perspective: “The Strong Dollar”

This is Mary Walden with economist MW, welcoming you to the economic perspective.   Today’s program looks at the strong dollar.  Mike, recently the value of the U.S. dollar against foreign currencies has risen.  On the surface this sounds good, but I understand everyone is not happen.  Why?

 

Mike:  Summary Answer

  1. Because the change in the dollar’s value has different effects on different parts of the economy
  2. Strong dollar is bad for exporters – makes our exports more expensive to foreign buyers; indeed, our trade deficit has risen
  3. But strong dollar is good for importers – we can buy items from foreign buyers more cheaply; also, attracts investors to the US
  4. Dollar has been rising because the US economy – now – is strongest among major world economies
  5. Europe is slowing, China is slowing, even Middle East countries dependent on oil are being hurt by low oil prices
  6. So mixed bag
  7. I’m MW

 

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.