Can this Currency Be Saved? The Decline of the Dollar, Spring 1995

The dollar began to slide precipitously against the Deutschemark and the Yen in early 1995. At the beginning of March 1995 the United States, joined by 13 other major industrial countries, intervened to support the dollar.Despite these efforts, the dollar continued to fall againstthe Deutschemark and the Yen, setting a series of record lows that Spring. This case considers the causes andconsequences of exchange-rate swings and the role for monetary policy and intervention policy in stabilizing currencies. This case can be taught at a variety of levels and two separate lesson plans are provided. The first lessonplan is appropriate for an intermediate macroeconomicscourse, an introductory-level international economics course or a course that focuses on financial markets. The second lesson plan is appropriate for an international finance course