Many economists have suggested that the weakening in the US dollar could actually be good for the economy—since a weaker dollar will boost manufacturing production, which in turn will lift employment and all this will set in motion economic growth. It follows then that the US dollar devaluation is exactly what is needed to keep the US economy going.
http://mises.org/daily/1345
devaluation
Reduction in the exchange value of a country's monetary unit in terms of gold, silver, or foreign
currency. By decreasing the price of the home country's exports abroad and increasing the price of imports in the home country, devaluation encourages the home country's export sales and discourages expenditures on imports, thus improving its
balance of payments.
http://encyclopedia2.thefreedictionary.com/Currency+devaluation
A key effect of devaluation is that it makes the domestic currency cheaper relative to other currencies. There are two implications of a devaluation. First, devaluation makes the country's exports relatively less expensive for foreigners. Second, the devaluation makes foreign products relatively more expensive for domestic consumers, thus discouraging imports. This may help to increase the country's exports and decrease imports, and may therefore help to reduce the current account deficit.
http://www.newyorkfed.org/aboutthefed/fedpoint/fed38.html
PARIS — As economists, pundits and politicians debate the reasons for
the dollar’s rapid fall, Robert Stevenson and his workers in downtown Buffalo, N.Y., watch the slide with glee.
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Doug Benz for The New York Times
"The dollar has allowed us to be much more aggressive overseas," said Robert Stevenson, head of Eastman Machine.
[h=4]Related[/h][h=2]Times Topics:
Dollar[/h]
Mr. Stevenson’s family-owned company, Eastman Machine, has been making cutting tools for the textile industry for 120 years. A year ago, in the depths of the
financial crisis, Mr. Stevenson had to lay off a dozen workers, but the dollar’s almost 20 percent decline since March has made his goods much more competitive overseas. Next month, Mr. Stevenson hopes to sign a multimillion-dollar deal in Europe that could enable him to rehire his workers.
“This wouldn’t have happened five years ago, or even two years ago,” he said. “Business conditions are still slow but the dollar has allowed us to be much more aggressive overseas.”
