11-05-2025
Stephen Miran's Overvalued Dollar Talk Is Dangerous
An academic paper has caught Asia's eye. In a piece published last November, Stephen Miran, Chairman of the Council of Economic Advisers and the brain behind the so-called Mar-a-Lago Accord, mentioned dollar ' overvaluation ' 10 times. It weighed on American manufacturing, blighted communities, and may even play a role in opioid addiction, he wrote.
The economist is probably right that the greenback is expensive. Until recently, the rest of the world was enamored with US assets, driving an uptrend that began in 2011. By the end of 2024, the currency was overvalued by 18.5%. That compares to 9.4% at the end of 2016 after President Donald Trump won his first election, Bank of America Merrill Lynch estimated based on the International Monetary Fund's real effective exchange rate model.
