Softening the U.S. Dollar, Italian Style
Do Italian pasta makers offer a fix for a U.S. dollar which is too strong?
February 5, 2002
In recent times, the U.S. dollar has been remarkably strong. Not only did its strength survive the terrorist attack on the World Trade Center, but it also outlasted the introduction of euro banknotes and coins. But now that the dollar has appreciated 25% since mid-1997, many in the U.S. economy are looking for something a bit easier to swallow.
That’s because when a country’s currency gets too strong, its export industry suffers. Today’s hard dollar sticks in the teeth of U.S. exporters. It makes American products more expensive — in dollar terms — relative to European products. Since an increasing portion of profits made by U.S. companies is derived from foreign markets, a hard dollar also negatively impacts stock prices — and the bonuses of America’s corporate executives.
When the euro was first created as a unit of account in 1999, one euro was worth around $1.25. Since then, dollar has been climbing steadily, shrugging off periodic attempts to weaken it. You now need only around 85 cents to buy one of those shiny new one-euro coins.
Dollari naïf is imported pasta in the shape of multicolored dollar signs, manufactured by Pastificio del Colle in the southern Italian province of Bari. It’s sold in specialty gourmet shops in Washington, D.C. and New York City.
America’s capital is also the city in which the World Bank and the International Monetary Fund have their headquarters. You really have to be a high-flying international financial bureaucrat to be able to afford the dollari naïf. The price tag on the half-kilo package is a cool $6.99 — or, translated into euros, about