Coordinated effort to deflate the dollar seems appealing again, Baker Institute expert says

EXPERT ALERT

David Ruth
713-348-6327
david@rice.edu

Jeff Falk
713-348-6775
jfalk@rice.edu

Coordinated effort to deflate the dollar seems appealing again, Baker Institute expert says
Baker Institute to host conference exploring legacy of 1985’s Plaza Accord Oct. 1   

HOUSTON – (Sept. 30, 2015) – The substantial run-up in the dollar over the past year has created tensions about competitive devaluations, and growing trade imbalances lurk around the corner, according to Russell Green, an economist at Rice University’s Baker Institute for Public Policy. The coordinated effort to deflate the dollar that resulted from the 1985 Plaza Accord among the world’s leading Western economies seems appealing again, Green said.

On Oct. 1 at the Baker Institute, Green will host a high-level conference to evaluate the accord’s lasting legacy. Participants will include former U.S. Treasury Secretary James Baker III, former chairman of the Federal Reserve Paul Volcker and other key players involved in the Plaza Accord, as well as top scholars and financial market experts. Green is available to comment on the accord and today’s instances of currency wars and currency manipulation.

The Plaza Accord was a major turning point in the exchange-rate policy during the 1980s, marked by heightened international cooperation and a falling dollar, according to event organizers. Gathered by Baker, the financial leaders of France, West Germany, Japan, the United States and the United Kingdom signed the accord Sept. 22, 1985, at the Plaza Hotel in New York City.

“Raising the stakes of dollar strength is the return of interest in Congress for trade issues,” said Green, the Baker Institute’s Will Clayton Fellow in International Economics and an adjunct assistant professor of economics at Rice. “Ominously, dollar strength will likely begin to inflate the U.S. trade deficit next year. Growing alongside the trade deficit will come calls to protect U.S. industries.

“The dynamics have changed, with new major economies and much weaker growth prospects, yet the experiment in policy coordination launched with the Plaza Accord still echoes loudly.”

The conference will be webcast live at http://bakerinstitute.org/events/1736.

For more information or to interview Green, contact Jeff Falk, associate director of national media relations at Rice, at jfalk@rice.edu or 713-348-6775.

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Related materials:

“Currency Policy Then and Now: 30th Anniversary of the Plaza Accord” conference: http://bakerinstitute.org/events/1736.

Green biography: http://bakerinstitute.org/experts/russell-green.

Founded in 1993, Rice University’s Baker Institute ranks among the top 10 university-affiliated think tanks in the world. As a premier nonpartisan think tank, the institute conducts research on domestic and foreign policy issues with the goal of bridging the gap between the theory and practice of public policy. The institute’s strong track record of achievement reflects the work of its endowed fellows, Rice University faculty scholars and staff, coupled with its outreach to the Rice student body through fellow-taught classes — including a public policy course — and student leadership and internship programs. Learn more about the institute at www.bakerinstitute.org or on the institute’s blog, http://blogs.chron.com/bakerblog.