The result was a steady appreciation of the dollar. Again we cannot fully explain the exchange-rate movements with the changes in the rates of return on bonds and physical capital, but these developments at least played an important role in the exchange-rate movements.
The stronger dollar, in turn, helped contain inflation and, along with faster growth here than in other industrial countries, contributed to a rising trade and current account deficit. 2  BIS Review 50/2001  II. A new economy again  One of my themes today is that we are in the new economy again.