Local Economists Are Optimistic Despite European Dollar Situation
The dollar is not in serious trouble following the increase in value of several European currencies, according to local economists.
"This is not a crisis for us," Thomas C. Schelling, professor of Economics, said yesterday. "I suspect there will be no serious effects on the U. S. economy."
Speculation as to the fate of the dollar was precipitated by West Germany's decision Sunday to permit the mark to float in relation to the dollar-and thus increase in value. Influenced by close trading ties with Germany, the Dutch decided to float the guilder, and the Swiss and Austrians increased the fixed value of their currencies in relation to the dollar.
The aim of the four countries was to use upward currency movement to get rid of excess dollars, which were aggravating problems of domestic inflation.
Charles P. Kindleberger, professor of Economics at M. I. T., said last night that he expects the increase in value of the four European currencies to have "positive and useful" effects on the U. S. economy.
Since the American dollar will be comparatively cheaper, American goods will cost less abroad and thus be purchased more. Likewise, goods imported from the nations that have more expensive currency will cost more here and have a harder time competing with American goods.