This chapter examines the effects of recent U.S. policies on such "external" variables as exchange rates and the balance of trade. It also examines their repercussions for America's principal trading partners. The focus is on adjustment in the short run and on the role of price and wage rigidities in bringing about the observed results. The chapter begins with a brief review of the major developments and then proceeds to an analysis of the relevant interrelations. An appendix provides a more formal treatment of the major analytical issues.
© 1984 American Enterprise Institute
Arndt, Sven W. 1984. The External Effects of U.S. Disinflation. In W. Fellner (ed.), Contemporary Policy Problems: Disinflation: 131-153. Washington, D.C.: American Enterprise Institute.