The exchange rate of the US dollar fell sharply last year. What part was played by the adverse “fundamentals” of the US economy, the large current account deficit, the country’s heavy foreign indebtedness and the substantial budget deficit? How will the dollar behave in future?

Structure of the Banking System and Monetary Policy Starting out from the investment preferences of banks and nonbanks, the increase in the formation of money substitutes by entities other than moneycreating banks is interpreted as a permanent improvement of the economy's liquidity concomitant...