High Dollar Value Called 'Critical Trade Problem'
Leading specialists in international economics from the Nixon and Carter administrations yesterday singled out the high value of the dollar in relation to other world currencies as AmericaÛªs ÛÏmost critical trade problemÛ and listed it as a major cause of the current recession.</br></br>In testimony before a House Ways and Means subcommittee, Peter G. Peterson, former president NixonÛªs Commerce secretary, blamed an overvaluation of the dollar, especially in relation to the yen, for fueling the United StatesÛª record merchandise trade deficit.</br></br>ÛÏThe deterioration of the trade balance was far greater than the decline in the housing or automobile industries, and has been the single most important cause of the current recession,Û added C. Fred Bergisten, assistant Treasury secretary for international economics in the Carter administration.</br></br>Both menÛÓwho are associated in the Institute for International Economics where Bergsten is the director and Peterson chairman of the boardÛÓpredicted that the merchandise trade deficit could reach $100 billion by next year, far higher than Reagan administration projections. Martin Feldstein, chairman of the presidentÛªs Council of Economic Advisers, said in mid-November that the 1983 trade deficit would be between $60 billion and $70 billion.</br></br>Peterson, board chairman of Lehman Brothers Kuhn Loeb Inc., added that the burgeoning trade gap could account for between 1 billion and 2 billion lost job opportunities and suggested that the administration and Congress should concentrate on trade problems rather than a road and bridge rebuilding program, which would add only 300,000 jobs.