Dollar Thrives in Age of Competitive Devaluations
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Jan. 29 (Bloomberg) -- In periods of prolonged economicpain -- notably the 2007-2009 global recession and the ensuingsubpar recovery -- international cooperation gives way to anevery-nation-for-itself attitude. This manifests itself inprotectionist measures, specifically competitive devaluationsthat are seen as a way to spur exports and to retard imports.
Trouble is, if all nations devalue their currencies at thesame time, foreign trade is disrupted and economic growth isdepressed.