Tuesday, June 8, 2021

Inflation and the weak dollar

 Good post about inflation, here is one part related to chapter 11


6) The USD is at a 3-year low. The way I look at it — and this is a vast oversimplification — is that a weak USD buys less in foreign goods, which increases the price of imports, contributing to inflationary pressures.

In other words, the falling dollar increases demand for domestic good because it raises the price of substitute imported goods.  

HT:   MarginalRevolution.com 

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