The Declining Dollar: Not a Simple Cure

The greenback must continue to fall, say many economists and now the Administration, if the U.S. is to curb its ruinous trade deficit. But no one can argue that such a strategy offers a simple and painless cure for America's economic ills. On the contrary, the perils are enormous and the effectiveness is uncertain. The immediate challenge for the Federal Reserve and the U.S. Treasury is to control the dollar's descent -- no easy feat -- and prevent a free fall, which would scare off foreign investors, drive up U.S. interest rates and perhaps cause another panic on Wall Street. But...