Thurow and Euro

Doug Henwood dhenwood at
Thu Dec 31 10:47:15 PST 1998

J Cullen wrote:

>If there is a run on the dollar, causing it to fall in value versus the
>euro, could that be a good thing for American producers, since American
>products would be more competitive on the world market? In other words, who
>gets burned if the dollar falls, bankers or workers?

If there's a run on the dollar, pretty much everyone within these borders would be burned, though obviously in varying degrees, and debtors more than creditors. If the U.S. couldn't borrow freely abroad in its own currency, it would mean that structural adjustment was coming home. Higher interest rates and a currency constraint is the last thing a country with $2 trillion in foreign debts needs.


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