Between 1977 and 1980 the Canadian dollar declined by more than 20 per cent compared to a weighted average of the currencies of 15 major industrial nations. Should we worry about the dollar? This author says no.
Chapter 1 sets the stage and presents a number of popular and fallacious views about the dollar crisis. Chapter 2 examines recent trends in unemployment, inflation, domestic and foreign interest rates, and in the value of our dollar in terms of the U.S. dollar and other major currencies. Chapter 3 then proceeds with an analysis of the fundamental factors determining the international value of the Canadian dollar in the long run. The short-run factors determining the dollar's value are addressed in Chapter 4, followed by a discussion of the relationship between interest rates and the dollar in Chapter 5. Chapter 6 investigates the reasons for the most recent decline in the dollar and considers what, if anything, can and should be done about it. The final chapter deals with the question of whether we should be losing any sleep over the problems of the Canadian dollar.