Going Down With the Dollar: The Cost to Developing Countries of a Declining Dollar
Publication Date: September 2004
Publisher(s): Center for Economic and Policy Research
Keywords: Devaluation; Trade liberalization; Federal deficit
Coverage: United States
In the years since the East Asian financial crisis in 1997, many developing countries have sought to increase their holdings of foreign reserves to protect their currencies against financial instability. This paper shows that, because the dollar is overvalued, this strategy may actually increase risks.