Re: Summers' Message to G7

["Alan G. Isaac" <aisaac@xxxxxxxxxxxx>]

Paul,

Without addressing Bergsten's predictive record
in general, you appear to be a bit unfair here.
>From 1980--85, the dollar appreciated markedly;
from about 1982--88 the current account declined
precipitously.
>From 1985--88 the dollar depreciated markedly;
from 1988--92 the current account improved
dramatically.

Of course the dramatic decline in the current
account since then has taken place w/o any
equally dramatic movement in the dollar.

Alan Isaac


Paul Davidson wrote:

> Why do people listen top Bergsten who has been wrong more often than
> right? (Remember in the  1980s,  Bergsten argued that a 35% drop in the
> dollar against the yen would end the US trade deficit. That was when the
> dollar was equal to 123 yen. The dollar went to 77 yen, with no major
> impact on the US trade deficit.