[lbo-talk] GS on the dollar

Doug Henwood dhenwood at panix.com
Tue May 20 12:36:10 PDT 2003


Michael Pollak wrote:


>1) Doesn't the J-curve dictate that the trade balance should get worse
>before it gets better when the dollar falls? Wouldn't that be covering
>exactly these next two quarters?

No. They say in the full piece that the USD started falling long enough ago that the stimulus is now about to kick in (they say the best regression fit is a 3-year change).


>2) When they say the dollar's fall should be just enough to to stem the
>deterioration of the trade balance, they're not saying it's enough to make
>it any better, right? Just that it won't get any worse. That it'll
>"stabilize" at the current negative $600 bln annually?

Right.

Doug



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