Saturday, December 02, 2006

The dollar is taking a dive

Well, it’s official. The cover story of the Economist magazine this week is about the depreciating dollar. As you will discover when you read Chapter 18 on International Financial Policy, there are winners and losers from a depreciating currency which should know about for your final.

Here is some online media coverage of the macro story of the week. The New York Times (as usual) has a good story in today’s edition on why the dollar depreciation is not so scary to many American politicians. Here is a link to the coverage in the Economist magazine on the declining dollar. Earlier this week NPR news had a nice audio on the winners and losers from the dollar’s swoon.

Extra Credit: Identify two groups that stand to gain, and two groups that stand to lose when a currency depreciates and loses value against other currencies. Hint, I want to do some traveling abroad in January, and I am not pleased with the situation. If you are the first student to send me an e-mail ( with the answer, you will be rewarded with three extra credit Discussion Board points. Only three points extra credit per student can be earned in any given week from the blog questions.

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