Kathryn Dominguez on the Strong Dollar, and Why It Matters

The U.S. dollar recently traded at par with the euro for the first time in almost 20 years, and the dollar now buys more British pounds than at any time since the mid-1980s. While the strength of the dollar is good for American tourists in the U.K. and the Eurozone and for those in the U.S. purchasing imports from those countries, it presents challenges for American exporters and has other disruptive effects for the world economy.  Why is the dollar so strong? What are the implications for the U.S. and other countries? In the face of these currency swings, does it make sense to reconstitute a fixed exchange rate system in order to promote greater macroeconomic stability? EconoFact Chats welcomes Kathryn Dominguez of the University of Michigan to discuss these issues. Kathryn is a Professor of Public Policy and Economics at the University of Michigan. She is also a member of the panel of economic advisors at the Congressional Budget Office, and is on the Economic Advisory Panel of the Federal Reserve Bank of New York.