Teaching Exchange Rates and the Value of the U.S. Dollar: A Portfolio, Global Stakeholder Approach
in Journal of International Business Education, Vol. 3, 2007, pp. 51-76 (Edinburgh, Scotland: Neilson Journals Publishing, 2007), 26 page(s)
Details
- Abstract / Summary
- By Alexander A. L. G. Zampieron and Joseph W. Weiss. A teaching approach based on stakeholder and portfolio theories is presented to explain how influential actors and factors now influence the U.S. dollar exchange rate in the global economy. Contrary to what classical economy theory states about Current Account deficit levels and the value of national currencies, there is a new dynamic at play with regard to the U.S. dollar. Notwithstanding the huge U.S. balance of payments deficits, the dollar has not fallen to the extent that classical economic theories predicted. A critically important reason for this is the role of surplus countries; they are massive holders of U.S. financial assets. Despite the fact that the U.S. has run significant balance of payment deficits, particularly with Japan and China, the dollar has remained relatively strong. The surplus countries have recycled their surpluses into dollar assets. If these countries move now to unload these assets, they run a risk of sustaining huge losses, as the dollar tumbles. A previous teaching model showed how a ‘strong’ and ‘weak’ dollar was determined by examining exports, imports, and external factors. This paper moves beyond that model to address the increasingly powerful role international stakeholders exert on the dollar. Recommendations for engaging students in this discussion are included.
- Field of Interest
- Travel
- Copyright Message
- Copyright © 2007 NeilsonJournals Publishing
- Content Type
- Periodical article
- Duration
- 0 sec
- Format
- Text
- Page Count
- 26
- Publication Year
- 2007
- Publisher
- Neilson Journals Publishing
- Place Published / Released
- Edinburgh, Scotland
- Source Title
- Journal of International Business Education, Vol. 3, 2007, pp. 51-76
- Subject
- Travel, Business & Economics, Personal Interest, Social Sciences, International Travel, Finance and Insurance, Viajes Internacionales, Viagem Internacional, United States of America, USA, US of A, America, Estados Unidos, International Monetary Fund, United States. Federal Reserve System, United States
- Keywords and Translated Subjects
- Viajes Internacionales, Viagem Internacional, United States of America, USA, US of A, America, Estados Unidos
