Fred Bergsten, John Williamson Dollar Overvaluation and the World Economy (2003)

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Do celu tam się wysiada. Lec Stanisław Jerzy (pierw. de Tusch-Letz, 1909-1966)
A bogowie grają w kości i nie pytają wcale czy chcesz przyłączyć się do gry (. . . ) Bogowie kpią sobie z twojego poukładanego życia (. . . ) nie przejmują się zbytnio ani naszymi planami na przyszłość ani oczekiwaniami. Gdzieś we wszechświecie rzucają kości i przypadkiem wypada twoja kolej. I odtąd zwyciężyć lub przegrać - to tylko kwestia szczęścia. Borys Pasternak
Idąc po kurzych jajach nie podskakuj. Przysłowie szkockie
I Herkules nie poradzi przeciwko wielu.
Dialog półinteligentów równa się monologowi ćwierćinteligenta. Stanisław Jerzy Lec (pierw. de Tusch - Letz, 1909-1966)

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.Interestingly, both Toyota and Honda attrib-uted the entire improvement in their profits to the depreciation of the yen.Using the change in profits reported by Honda and Toyota in 2001, itappears that Toyota s profits improve by 20 billion for every one-yenYfall in the yen against the dollar.For Honda, which has a higher level ofproduction relative to sales in the United States, the improvement isaround 12 billion.Using a longer data set, Morgan Stanley estimatesYthat Toyota s profits change by $125 per unit for each percentage pointchange in the value of the yen against the dollar ( Weaker Dollar MayChange Strategic Outlook, Equity Research, May 31, 2002).If it was only profits that were being increased, US automakers wouldbe less concerned.But with auto sales in Japan stagnant, Japanese autocompanies have taken advantage of the weak yen to increase marketshare in the United States.In the past two years, the share of the US automarket captured by imports from Japan has jumped by 1.2 percentagepoints.The Korean manufacturers, who also enjoy a weak currency, havegained another 1.2 percentage points, and the European manufacturershave gained about 0.8 percentage points.In total, the import share hasgained 3.2 percentage points.Of course, the Japanese also have gainedshare through increasing local production, which also benefits from theweaker yen.But, contrary to public-relations statements from Japan, muchof the gain has come from imports.Indeed, Morgan Stanley estimates a0.75 percent correlation between Japanese import share and longer-termmovements in the yen versus the US dollar.It has been suggested that US manufacturers can offset the currencychanges through hedging.That is not true, however.US companies canand do hedge their own currency exposure, but they can t hedge theircompetitive exposure.More important, they shouldn t have to.The autoindustry is already intensively competitive.It should not be forced tocompete against subsidized competitors.Indeed, intervention on the scale that Japan has engaged in is no differ-ent from other forms of subsidies that governments offer.That is whythe World Trade Organization has explicit provisions against currencymanipulation.That is also why the International Monetary Fund pro-scribes manipulation of currency values.And that is why the OmnibusTrade Act of 1988 required the US Treasury Department to monitor cur-rency manipulation by other countries and to take appropriate measuresto prevent other countries from manipulating their currencies to gain acompetitive advantage for their producers.142 DOLLAR OVERVALUATION AND THE WORLD ECONOMYCopyright 2003 Institute for International Economics | http://www.iie.comThere is only one reason that Japan is intervening in currency marketstoday to give its firms an unfair competitive advantage.Of course, US automakers have to focus on things under their controlproducts, manufacturing efficiency, and supply chain management andthey are doing that.Productivity at GM, for example, has increased sub-stantially, and quality has improved even more as the time required tobring new products to market has declined.However, it is difficult toovercome a currency disadvantage of 20 percent or more.Nor is this a short-term problem.Japanese, Korean, and Europeanauto manufacturers are plowing their profits back into products andproduction facilities, some of which are in the United States.In otherwords, not only are they getting a short-term advantage, they could wellbe gaining a longer-term advantage.ConclusionThe second half of the 1990s marked a revival of fortunes for the Americanauto industry.The strong US economy and demand for vehicles, a compet-itive value of the dollar, strong products, improved quality, and restruc-turing of manufacturing allowed the domestic manufacturers to competesuccessfully with foreign-owned manufacturers.GM and Ford solidifiedtheir positions as the number one and two manufacturers in the world.And, although Chrysler merged with Daimler, the combined companyDaimlerChrysler became the number three manufacturer.In the mean-time, Japanese auto companies struggled with a weak home market andan appreciated yen.The new millennium has started with another reversal.The Americancompanies are struggling to earn a profit while the Japanese companiesare again in ascendancy.To be sure, some of the American companiesproblems and the Japanese companies recent success can be attributedto market factors.However, an even larger contributor to the relativeperformance has been Japan s intervention to lower the value of the yen.The weak yen has lowered the cost of vehicles imported from Japan byroughly $3,000 on a $25,000 vehicle.It is no surprise that Japanese compa-nies are reporting record profits and expansion around the world whileAmerican companies are announcing significant cutbacks in capacity andemployment.IMPACT OF THE STRONG DOLLAR ON THE U.S.AUTO INDUSTRY 143Copyright 2003 Institute for International Economics | http://www.iie.comCopyright 2003 Institute for International Economics | http://www.iie.com7The Overvalued Dollar andthe US SlumpTHOMAS I.PALLEYDangers of the Dollar BubbleOver the past seven years the value of the dollar has appreciated dramati-cally against almost all major currencies.Since bottoming out in 1995, thereal value of the dollar has steadily risen against both the Federal Reserve sbroad basket of currencies (which includes all major trading partners inEurope, East Asia, and Latin America) and against the Fed s basket ofcurrencies for major industrialized counties.1 Relative to the broad basket,the appreciation has been 32 percent as of September 2002, and relativeto the major industrialized currencies basket, it has been 40 percent.Thisappreciation pushed the dollar to a 16-year high in early 2002, and itremains stubbornly close to this peak despite the much ballyhooed recenttalk of a weakening dollar.Thus, as of September, the broad basket ofcurrencies was just 1 percent below the February 2002 peak [ Pobierz całość w formacie PDF ]

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