An introduction to a new exchange-rate index to measure the foreign-exchange value of the dollar. The authors develop a model of U.S. merchandise trade, featuring the new index.

A discussion of the costs associated with trade restraint, focusing on devices currently used or recently proposed in the United States.

An argument that for countries with well-developed money markets and flexible exchange rates, there is little to be gained from holding a vast foreign exchange portfolio and intervening in the world's currency markets.

An examination of causality between dollar exchange-rate movements and U.S. price levels as described by the relative purchasing power parity theory, with a discussion of channels of price pressure and of the Hooper-Lowrey method of estimating future trends of the dollar.