Embedded Files
For interest:
"What happens when Greece defaults" (from the London Telegraph, May 30, 2011)
Christina Romer on the value of the US dollar (New York Times, May 21, 2011)
The Big Mac Index for predicting exchange rate movements. Alternatively, how many minutes of work does it take to get buy a Big Mac?
The latest on the Big Mac Index (New York Times, July 23, 2010)
Trade Weighted Value of the US Dollar - FRED (St. Louis Federal Reserve)
The Trilemma of International Finance, by Greg Mankiw (New York Times, July 9, 2010)
Have Obama's policies affected the value of the dollar? (Slate, Jan. 11, 2010)
Federal Reserve list of exchange rate
US Balance of Payments (US Bureau of Economic Analysis)
Is the IMF killing people with tuberculosis? (New York Times, July 22, 2008) More from Slate (July 2008)
Wow, that would be bad. Interesting econometric work. Does the IMF make troubled countries cut their government spending so much that they reduce spending for fighting TB?
Where do countries get the symbols for their currencies? (Slate, July 15, 2010)
Exchange Rate Data:
Here is data on the exchange rate between the dollar and other major currencies From FRED II, a great data service of the St. Louis Federal Reserve. (And another source, Google Finance)
US $ versus English Pound For much of the 1970s, it was about $2.40 to the pound, then in the mid-1980s it was almost $1 = 1 pound (great time to go to England, so I did!), now it's back to about $2 to the pound...so now my English friends come visit me.
Thailand This is cool. Thailand fixed the exchange rate of the Baht to the dollar from 1980 to 1985, then fixed its value to an average of a basket of major currencies until 1997...when a little thing known as the "Asian Crisis" came along. Ba-boom!
Canada Eh, the Canadian dollar is now worth a real dollar!
Japan So, now the yen is basically a penny.
So, a bunch of European countries got together and decided to give up their currencies and start up a new currency that they would all use. Basically, it was a bunch of countries with fairly bad records on inflation, and Germany. Germany had really bad experiences with inflation in the first half of the 20 century (and a few other bad habits we won't go into right now), and so since then has taken a strong stance against having inflation and against invading its neighbors and hasn't had either of these problems since.
What does one call a new currency? It's a bunch of Europeans, so...how about something with that? Maybe take the second part of the word? No? Maybe the first part? OK.
The level of a currency doesn't really matter very much. Japan isn't worse or better off than England because it takes 200 yen to buy one pound. However...I think the folks who created the euro had some issues and so really wanted the exchange rate between the euro and the dollar to be such that it would take more than one dollar to buy a euro. (By "issues", I mean the same sorts of issues that are key to the sales of Hummer automobiles to people who live in urban areas, and no, I don't mean a desire to be able to see over other cars in traffic.)
For amusement:
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