Thomas Grennes’s letter criticizing my article, "The Unsustainability of the US Trade Deficit," fails to distinguish between the trade deficit and the current account deficit, and therefore does not respond to my argument.

Abstract Almost all countries face the problems of trade balance, although they are more inherent in developing countries and economies in transition. A majority of economists adhere to a common opinion that real depreciation may lead to an improvement of trade balance. That said, countries...

Abstract In the aftermath of the recent financial crisis, the central banks of small open economies such as the Swiss National Bank (SNB) implemented a unilateral one-sided exchange rate target zone vis-à-vis the euro currency to counteract deflationary pressures. Recently, the SNB abandoned...