Thirteen Myths of a Strong Dollar

Publication Date: January 1985

Publisher: Heritage Foundation (Washington, D.C.)

Author(s): Edward L. Hudgins

Research Area: Economics

Keywords: Economy

Type: Report


In the past few years, the U.S. dollar has regained much of the strength that it lost during the 1970s. This is no cause for alarm. The dollar is not a "problem" requiring a government "solution.'' The dollar's strength reflects the strength of the U. S . economy; It reflects many economic and noneconomic factors. Not surprisingly, therefore, the strong dollar is generally good for the U.S. economy. Those who wish to weaken the dollar in order to increase U.S. exports misunderstand the causes and consequences of the strong dollar. They fail also to realize that the negative consequences of a weakened dollar would far outweigh any initial modest trade benefits. Rather than a cause for concern, a strong dollar is a cause for satisfaction and pride.