Volume 41, Number 17 · October 20, 1994
Must We Compete?
By Benjamin M. Friedman
Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations
by Paul Krugman
Norton, 303 pp., $22.00
The summer's renewed decline of the dollar against the yen, at long last making one US cent worth less than one Japanese yen, has once again concentrated public attention on America's difficulties in international economic relations. Concerns along such lines were also widespread a decade or so ago, when a combination of surging American demand for foreign goods and weak demand abroad for American-made products resulted in an overall US trade imbalance that widened to record proportions. But in the mid-1980s the dollar was expensive in relation to most foreign currencies, and it was plausible to suppose that both the rise in US imports and the weakness of US exports were in large part just the consequence of an overvalued dollar. Today the dollar is cheap, yet America's trade imbalance is once again large and growing steadily larger.
Review, 5572 words
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