dollar and inflation
Divergent Paths in the Internal and External Value of the Dollar
September 2, 2022
Domestic inflation measures shrinkage in the internal value of the dollar. As the general level of U.S. prices rises, a dollar commands less and less value in terms of the amount of goods or services that can be purchased with it. The higher inflation goes, the faster its internal purchasing power shrinks. The external value […] More
Dollar Volatility and Inflation
November 22, 2021
The acceleration of inflation in 2021 has been broadly experienced across the world and remarkable in its suddenness. Year-on-year inflation rates last December were both low and more tightly bunched than now. In the cases of Japan, Switzerland and the euro area, inflation was lower than zero back then at -1.2%, -0.8% and -0.3%, respectively. […] More
Dollar and Relative Inflation
February 15, 2018
One theory of long-term exchange rate determination known as Purchasing Power Parity stipulates that currency movements have a tendency eventually to offset variations in relative inflation rates, such that the amount of currency A needed to purchase a bundle of trade-exposed goods in country A when converted into currency B will be just enough to […] More
