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Plaza Accord of 1985 Leads to Dollar Depreciation
Plaza Accord of 1985 Leads to Dollar Depreciation
::2007/08/11::
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2
Plaza Accord
Plaza Accord
::2012/10/31::
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3
Global Imbalance and China Revisited: Yen and Yuan; Another Plaza Accord
Global Imbalance and China Revisited: Yen and Yuan; Another Plaza Accord
::2013/02/01::
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the Plaza Accord and the IMF
the Plaza Accord and the IMF's SDRs
::2010/06/13::
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car stereo plaza accord part 1
car stereo plaza accord part 1
::2011/10/02::
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car stereo plaza accord part 2
car stereo plaza accord part 2
::2011/10/05::
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7
Rana Plaza: Never again
Rana Plaza: Never again
::2014/04/23::
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8
WTF?!--Bangladesh Factory Safety Accord/Rana Plaza Factory Accident
WTF?!--Bangladesh Factory Safety Accord/Rana Plaza Factory Accident
::2013/05/20::
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9
Saujana Putra Exit 2012.24 SKVE Highway PLUS Toll Plaza Honda Accord (Mini GTR) Drive down
Saujana Putra Exit 2012.24 SKVE Highway PLUS Toll Plaza Honda Accord (Mini GTR) Drive down
::2013/08/31::
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10
Brazil
Brazil's Mantega Says G-20 Can Agree on Currency Accord: Video
::2012/03/23::
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11
2009 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
2009 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
::2014/01/26::
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2010 Honda Accord Sdn EX - Kindle Auto Plaza - SOUTH JERS...
2010 Honda Accord Sdn EX - Kindle Auto Plaza - SOUTH JERS...
::2014/07/28::
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2008 Honda Accord Sdn EX-L - Kindle Auto Plaza - SOUTH JERSEY, NJ 08210
2008 Honda Accord Sdn EX-L - Kindle Auto Plaza - SOUTH JERSEY, NJ 08210
::2014/06/14::
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14
2005 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
2005 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
::2013/10/02::
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15
Honda Accord LX MANUAL @ Extreme Auto Plaza
Honda Accord LX MANUAL @ Extreme Auto Plaza
::2011/10/12::
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16
2004 Honda Accord $8495 405-787-7000 by Auto Plaza
2004 Honda Accord $8495 405-787-7000 by Auto Plaza
::2014/09/25::
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17
2003 Honda Accord $7495 405-787-7000 by Auto Plaza
2003 Honda Accord $7495 405-787-7000 by Auto Plaza
::2014/07/27::
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18
Al Serra Auto Plaza - New 2011 Honda Accord Crosstour
Al Serra Auto Plaza - New 2011 Honda Accord Crosstour
::2011/08/25::
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19
Rana Plaza Disaster: Activists form human chain in Oxford Street
Rana Plaza Disaster: Activists form human chain in Oxford Street's Gap Shop
::2014/04/24::
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20
2008 HONDA ACCORD - Pahrump Valley Auto Plaza - Pahrump, NV
2008 HONDA ACCORD - Pahrump Valley Auto Plaza - Pahrump, NV
::2013/07/09::
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21
2007 Honda Accord Cpe LX - Hubler Auto Plaza - O
2007 Honda Accord Cpe LX - Hubler Auto Plaza - O'Fallon, ...
::2014/08/12::
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22
Honda Accord EX AUTO V6 W/LEATHER @ Extreme Auto Plaza
Honda Accord EX AUTO V6 W/LEATHER @ Extreme Auto Plaza
::2011/10/12::
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23
2007 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
2007 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
::2013/04/20::
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24
Al Serra Auto Plaza - New 2011 Honda Accord Coupe
Al Serra Auto Plaza - New 2011 Honda Accord Coupe
::2011/08/24::
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25
2008 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
2008 Honda Accord Sdn - TDR Auto Plaza - Kearney, MO 64060
::2012/10/30::
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26
Is Our Trade Deficit a Problem? Foreign Exchange Reserves, Money Markets, Forex (2005)
Is Our Trade Deficit a Problem? Foreign Exchange Reserves, Money Markets, Forex (2005)
::2014/08/29::
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27
2008 Honda Accord - TDR Auto Plaza - Kearney, MO 64060
2008 Honda Accord - TDR Auto Plaza - Kearney, MO 64060
::2013/02/23::
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28
2002 Honda Accord Cpe - TDR Auto Plaza - Kearney, MO 64060
2002 Honda Accord Cpe - TDR Auto Plaza - Kearney, MO 64060
::2013/05/31::
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29
2004 Honda Accord available from Auto Plaza, Inc.
2004 Honda Accord available from Auto Plaza, Inc.
::2011/01/28::
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30
2003 Honda Accord available from Auto Plaza, Inc.
2003 Honda Accord available from Auto Plaza, Inc.
::2011/01/05::
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31
Honda Accord LX AUTO V6 ULEV @ Extreme Auto Plaza
Honda Accord LX AUTO V6 ULEV @ Extreme Auto Plaza
::2011/10/26::
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32
2011 HONDA ACCORD - Pahrump Valley Auto Plaza - Pahrump, NV
2011 HONDA ACCORD - Pahrump Valley Auto Plaza - Pahrump, NV
::2013/06/09::
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33
2005 HONDA ACCORD - Pahrump Valley Auto Plaza - Pahrump, NV
2005 HONDA ACCORD - Pahrump Valley Auto Plaza - Pahrump, NV
::2012/08/26::
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34
Bangladesh: The Rana Plaza Tragedy
Bangladesh: The Rana Plaza Tragedy
::2014/09/03::
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35
2015 Honda Accord Coupe Cedar Falls IA H8827
2015 Honda Accord Coupe Cedar Falls IA H8827
::2014/09/10::
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36
2004 Honda Accord Cpe - TDR Auto Plaza - Kearney, MO 64060
2004 Honda Accord Cpe - TDR Auto Plaza - Kearney, MO 64060
::2013/03/28::
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37
2007 Honda Accord available from Auto Plaza, Inc.
2007 Honda Accord available from Auto Plaza, Inc.
::2011/01/29::
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38
Ireland calls for justice for Rana Plaza workers 24 April 2014
Ireland calls for justice for Rana Plaza workers 24 April 2014
::2014/04/25::
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39
2009 Honda Accord LX-P Sedan AT for sale in Long Island City
2009 Honda Accord LX-P Sedan AT for sale in Long Island City
::2014/06/13::
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40
"M" Delfino Plaza Super Mario Sunshine
"M" Delfino Plaza Super Mario Sunshine
::2010/07/29::
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41
2008 Honda Accord EX-L Coupe AT for sale in KANSAS CITY, MO
2008 Honda Accord EX-L Coupe AT for sale in KANSAS CITY, MO
::2014/01/15::
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42
Philip Jennings - 12 months on
Philip Jennings - 12 months on
::2014/04/22::
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43
2008 Honda Accord EX-L V6 Sedan for sale in Houston, TX 7706
2008 Honda Accord EX-L V6 Sedan for sale in Houston, TX 7706
::2014/07/29::
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44
Super Mario Sunshine - Delfino Plaza Theme
Super Mario Sunshine - Delfino Plaza Theme
::2012/04/23::
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45
2012 Honda Accord EX 2dr Coupe 5M for sale in Long Island Ci
2012 Honda Accord EX 2dr Coupe 5M for sale in Long Island Ci
::2014/06/13::
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46
3PAC - "WINNIN" LIVE AT CROWNE ROYAL CABANA PLAZA (PALO ALTO CALIFORNIA SON)
3PAC - "WINNIN" LIVE AT CROWNE ROYAL CABANA PLAZA (PALO ALTO CALIFORNIA SON)
::2014/09/10::
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47
2006 Honda Accord EX-L Sedan with XM Radio - for sale in Ros
2006 Honda Accord EX-L Sedan with XM Radio - for sale in Ros
::2013/08/10::
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48
HERMITAGE  PLAZA: two 320-metre-high towers beside the Seine, just outside Paris.
HERMITAGE PLAZA: two 320-metre-high towers beside the Seine, just outside Paris.
::2014/01/25::
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49
2015 Honda Accord - Grand Blanc MI
2015 Honda Accord - Grand Blanc MI
::2014/10/23::
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2015 Honda Accord - Grand Blanc MI
2015 Honda Accord - Grand Blanc MI
::2014/10/23::
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From Wikipedia, the free encyclopedia
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The 1985 "Plaza Accord" is named after New York City's Plaza Hotel, which was the location of a meeting of finance ministers who reached an agreement about managing the fluctuating value of the US dollar. From left are Gerhard Stoltenberg of West Germany, Pierre Bérégovoy of France, James A. Baker III of the United States, Nigel Lawson of Britain, and Noboru Takeshita of Japan.

The Plaza Accord or Plaza Agreement was an agreement between the governments of France, West Germany, Japan, the United States, and the United Kingdom, to depreciate the U.S. dollar in relation to the Japanese yen and German Deutsche Mark by intervening in currency markets. The five governments signed the accord on September 22, 1985 at the Plaza Hotel in New York City.

Background[edit]

Between 1980 and 1985 the dollar had appreciated by about 50% against the Japanese yen, Deutsche Mark, French Franc and British pound, the currencies of the next four biggest economies at the time.[citation needed] This caused considerable difficulties for American industry but at first their lobbying was largely ignored by government. The financial sector was able to profit from the rising dollar, and a depreciation would have run counter to Ronald Reagan's administration's plans for bringing down inflation. A broad alliance of manufacturers, service providers, and farmers responded by running an increasingly high profile campaign asking for protection against foreign competition.

Major players included grain exporters, car producers, engineering companies like Caterpillar Inc., as well as high-tech companies including IBM and Motorola. By 1985, their campaign had acquired sufficient traction for Congress to begin considering passing protectionist laws. The prospect of trade restrictions spurred the White House to begin the negotiations that led to the Plaza Accord.[1][2]

The justification for the dollar's devaluation was twofold: to reduce the U.S. current account deficit, which had reached 3.5% of the GDP, and to help the U.S. economy to emerge from a serious recession that began in the early 1980s. The U.S. Federal Reserve System under Paul Volcker had halted the stagflation crisis of the 1970s by raising interest rates, but this resulted in the dollar becoming overvalued to the extent that it made industry in the U.S. (particularly the automobile industry) less competitive in the global market.

Effects[edit]

Devaluing the dollar made U.S. exports cheaper to purchase for its trading partners, which in turn allegedly meant that other countries would buy more American-made goods and services.

The exchange rate value of the dollar versus the yen declined by 51% from 1985 to 1987. Most of this devaluation was due to the $10 billion spent by the participating central banks.[citation needed] Currency speculation caused the dollar to continue its fall after the end of coordinated interventions. Unlike some similar financial crises, such as the Mexican and the Argentine financial crises of 1994 and 2001 respectively, this devaluation was planned, done in an orderly, pre-announced manner and did not lead to financial panic in the world markets. The Plaza Accord was successful in reducing the U.S. trade deficit with Western European nations but largely failed to fulfill its primary objective of alleviating the trade deficit with Japan. This deficit was due to structural conditions that were insensitive to monetary policy, specifically trade conditions.

The manufactured goods of the United States became more competitive in the exports market but were still largely unable to succeed in the Japanese domestic market due to Japan's structural restrictions on imports.

The recessionary effects of the strengthened yen in Japan's export-dependent economy created an incentive for the expansionary monetary policies that led to the Japanese asset price bubble of the late 1980s. The Louvre Accord was signed in 1987 to halt the continuing decline of the U.S. dollar.

The signing of the Plaza Accord was significant in that it reflected Japan's emergence as a real player in managing the international monetary system. Yet it is postulated[3] that it contributed to the Japanese asset price bubble, which ended up in a serious recession, the so-called Lost Decade.

See also[edit]

References[edit]

  1. ^ Michael J. Hiscox (2005). "The Domestic Sources of Foreign Economic Policies". In John Ravenhill. Global Political Economy (First ed.). Oxford; New York: Oxford University Press. p. 65. ISBN 0-19-926584-4. OCLC 60383498. 
  2. ^ I. M. Destler, C. Randall Henning (1993). Dollar Politics: Exchange Rate Policymaking in the United States. Institute for International Economics. pp. 105–130. ISBN 0-19-926584-4. 
  3. ^ "China seeks to learn from mistakes of 1985 Plaza Accord". The Japan Times. 9 September 2006. Archived from the original on 28 January 2012. Retrieved 27 September 2011. 

External links[edit]

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