How Far Has the Dollar Fallen?

Abstract

The extent of the dollar's decline relative to its peak in 2002 depends upon the composition of the basket of currencies used in calculating the dollars value. Further, the appropriate index depends upon the question being asked, with the type of price deflators used if any dependent upon the question at hand. Various measures of the dollars value are discussed, and compared, including alternative weights based on liabilities and assets, instead of the standard trade flow weights.