Dollars, Deficits, and Trade

The essays in this volume are timely and provocative. They address the key issues of the changing world economy and consider the implications of the erosion of the rule of law that has occurred both domestically and internationally to an increasing degree over the past half century. The debates over the role of the dollar in the international economy, the future shape of the international monetary system and the exchange rate regime, the significance of the U.S. twin deficits, and the rise of non tariff barriers to world trade deserve serious attention. At the bottom of these debates lie differing conceptions of economic policy and the role of government in a free society. Although the authors disagree on the specific rules to adopt, the consensus is that a constitutional perspective is needed to ensure a stable world order. Moreover, since such a perspective must be developed at home before it can spread among nations, the search for optimal international policy coordination is generally seen as misguided.

James Dorn is Cato’s vice president for academic affairs, editor of the Cato Journal and director of Cato’s annual monetary conference. William A. Niskanen is chairman emeritus and a distinguished senior economist at the Cato Institute. Between 1985 and 2008, Niskanen was the chairman of the Cato Institute, following service as a member and acting chairman of President Reagan’s Council of Economic Advisers. Niskanen has served as director of economics at the Ford Motor Company, professor of economics at the University of California at Berkeley and Los Angeles, assistant director of the federal Office of Management and Budget, a defense analyst at the Rand Corporation, the director of special studies in the Office of the Secretary of Defense, and the director of the Program Analysis division at the Institute of Defense Analysis. He has written on many public policy issues including corporate governance, defense, federal budget policy, regulation, Social Security, taxes, and trade. Niskanen’s 1971 book Bureaucracy and Representative Government is considered a classic. His most recent book is Reflections of a Political Economist: Selected Articles on Government Policies and Political Processes. Niskanen holds a B.A. from Harvard and a Ph.D. in economics from the University of Chicago. The University of Chicago recently honored him with a lifetime professional service award.