Abstract:
We link the sustained appreciation of the U.S. dollar from 2011 to 2019 to international
capital flows driven by primitive economic factors. We show that increases in foreign
investors’ net savings, increases in U.S. monetary policy rates relative to the rest of the
world, and shifts in investor demand for U.S. financial assets contributed approximately
equally to the dollar’s appreciation. We then quantify the impact of potential future
demand shifts for U.S. assets on the value of the dollar.
Organizers: Organizers: Jeff Wurgler (jwurgler@stern.nyu.edu). Please email if you would like to request a slot.
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