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Do We Need a Plaza Accord 2.0?

The dollar and the yen, now coupled with the renminbi, are in a situation that recalls the 1980s, which has led some politicians to consider creating a Plaza Accord 2.0. Instead, they should focus on the benefits provided by flexible exchange rates.

NEW HAVEN – Thanks to sustained high interest rates in the United States, the dollar has been soaring against other currencies. That’s bad news for domestic US producers and good news for those abroad.