the euro

[Bradford DeLong]

>I'd love to be a fly on the wall at one of the monthly central 
>banker chatfests at the BIS. I can imagine a bunch of dour Euros 
>telling Alan that he's got to do something about the c/a deficit. 
>And now they're going to have a currency that may force him to do it.
>
>Doug

I presume that he tells them that they have to do something about 
their current account *surplus*: the U.S. has low inflation and 
(near) full employment--the trade imbalance is driven more by a 
depressed Europe whose imports are too low than by an 
overly-exuberant U.S. whose imports are too high.

But if they don't, then we are likely to see a large and rapid 
depreciation of the dollar sometime in the future...

Brad DeLong