Understanding the Strength of the Dollar

Zhengyang Jiang, Robert J. Richmond, Tony Zhang

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

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Year of publication:	October 2022
Authors:	Jiang, Zhengyang ; Richmond, Robert J. ; Zhang, Tony
Institutions:	National Bureau of Economic Research (issuing body)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	US-Dollar \| US dollar \| Wechselkurs \| Exchange rate \| Kapitalmobilität \| Capital mobility \| Gesamtwirtschaftliche Nachfrage \| Aggregate demand \| Wirkungsanalyse \| Impact assessment \| USA \| United States