I haven't read the whole thing in detail, but a central argument is that the dollar is artificially strong due to its currency reserve "status". But looking at the DXY I can't really see a strong trend over time? (https://www.marketwatch.com/investing/index/dxy ("all" have data back to 1986)). Yes, DXY does not cover all currencies, but doesn't this mean that the EUR, GBP, etc. also carry a similar burden as the USD?
"It’s worth noting that value-added taxes are a form of tariffs because they exempt exported goods but tax imported goods, and central banks usually do not respond to them, because legislated price changes are typically thought not to be indicative of underlying supply-demand imbalances."
Can someone expand on whether there is any truth to this at all? (See also a lengthy discussion thread here [1] on the same topic, where I could not get a satisfying answer)
>> The Honorable Stephen Miran is Chairman of the Council of Economic Advisers in President Donald Trump’s second Administration. On December 22, 2024, President Trump announced his intention to nominate Miran to be the 32nd CEA Chair, and he was confirmed by the Senate on March 12th, 2025.
Figured it was an interesting look into what the administration is trying to strategically do with the world economy, whether you agree or disagree with the goals and/or effectiveness.
> Despite the dollar’s role in weighing heavily on the U.S. manufacturing sector, President Trump has emphasized the value he places on its status as the global reserve currency, and threatened to punish countries that move away from the dollar.
Maybe the US should accept that it can't (or shouldn't) be allowed to have the cake an eat it too, and simply take steps to stop the USD from being the global currency reserve then? Surely there are some measures that can be made? (Or at least not actively work against it happening: "threatened to punish countries that move away from the dollar")
>> There is a path by which these policies can be implemented without material adverse consequences, but it is
narrow, and will require currency offset for tariffs and either gradualism or coordination with allies or the Federal
Reserve on the dollar. Potential for unwelcome economic and market volatility is substantial, but there are steps
the Administration can take to minimize it.
"gradualism", "coordination with allies", are things that this administration is famously good at, so it's probably all going to work out /s
"I, however, don’t find Miran puzzling at all, thanks to my long experience as (among other things) an economics professor at MIT, Princeton and CUNY. You see, I recognize the genre. Most years, at least one student tries to BS his way through the term paper requirement by producing something with a bunch of learned-sounding references and some gratuitous equations, hoping that you won’t notice the absence of any coherent argument.
And when I say lack of coherence I don’t mean that I disagree; I mean that the document simply doesn’t hang together. Part 3 makes the case for tariffs by arguing that they won’t be inflationary because they’ll lead to a stronger dollar, reducing import prices. Part 4 then calls for an all-out effort to weaken the dollar, using emergency powers if necessary.
Oh, and Miran’s plan for weakening the dollar involves pressuring foreign governments to stop accumulating dollar reserves — in effect, diminishing the role of the dollar as a reserve currency. (That wouldn’t work, but never mind.) Let’s hope nobody tells Trump, who has threatened to impose punitive tariffs on any country that dares move away from the dollar."
