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Weak dollar, strong economy


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November 11, 2004

Weak dollar, strong economy

Oil prices are falling, job growth is surging, and the fiscal deficit is leveling off. It now appears that the economy is stronger than many people thought. But what about the weak dollar? A weak currency typically leads to higher inflation and interest rates, which can cause economic havoc. But the weak dollar hasn't caused a crisis yet, and there's no sign that it will. It actually may do the economy a lot of good, boosting jobs in the manufacturing sector and bringing the U.S. trade deficit down to a reasonable level.

As Republicans and Democrats battle for leverage in the second Bush administration, the dollar could play a big role in setting the economic tone. Right now, it looks like the dollar is going to help the economy more than it's going to hurt. That's my argument, which is available today at BusinessWeek Online.

11:58 PM

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