Since 2002, the dollar has lost about a third of its value compared with other currencies. That doesn't sound good — and it's not, if you're a Japanese exporter or an American tourist. But it is potentially great news for American workers.
Experts argue about the many effects of the dollar's fall and what it says about confidence in the American economy, with its decades-old trade deficit and mounting national debt. But there are also more predictable effects replayed in each decline.
Last week, as President Obama convened a summit meeting on unemployment, the devalued dollar was already doing its part to create jobs by making American goods cheaper abroad.
"I don't think anything they can come up with is as powerful as the dollar declining," said Kenneth S. Rogoff, a Harvard economist. "It's a good short-term boost. Every country's manufacturing sector loves it when the currency has a moderate depreciation."
But the benefit to American exporters goes only so far. Some economists say it hurts industry in the long run: companies can reap the rewards of the falling dollar without improving products or productivity. When the dollar rebounds, they falter anew.