CEPII, Recherche et Expertise sur l'economie mondiale
The Dollar in the Turmoil

Agnès Bénassy-Quéré
Sophie Béreau
Valérie Mignon

 Highlights :

 Abstract :
We study the impact of the global financial crisis on the equilibrium exchange rate of the US dollar. We first simulate the impact of the crisis on the US net foreign asset position. Then, we calculate the equilibrium value of the dollar according both to a BEER and to a FEER approach. We find the case for a strong, although temporary, depreciation of the dollar even more acute than before the crisis. This suggests that the strength of the dollar in late 2008 and early 2009 may be short-lived.

 Keywords : Equilibrium exchange rate | US dollar | Global imbalances | Crisis | Valuation effects

 JEL : F31, C23
CEPII Working Paper
N°2009-08, April 2009

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 Fields of expertise

Money & Finance