U.S. Is Shifting Economic Plans To Boost Dollar --- Concessions by Europeans Prompt Efforts to Shape New International Policy
WASHINGTON -- In the wake of European economic concessions, the U.S. is making a subtle but significant shift in its international economic policy to put greater emphasis on supporting the dollar.</br></br>The policy change, which has emerged in recent days, follows last week's major round of interest-rate cuts in Europe, led by West Germany, and the announcement of a West German fiscal-stimulus package.</br></br>Both moves had long been sought by the Reagan administration, and European officials last week called on the U.S. to reciprocate by showing stronger support for the dollar, whose recent depreciation has hurt foreign concerns selling in the U.S.</br></br>The broad policy trade-off accomplishes some of the steps that governments have been hinting would take place at a new meeting of the Group of Seven industrial nations. Thus it may ease pressure to convene such a meeting before year end.</br></br>Since the Oct. 19 stock-market crash, the Reagan administration and the Federal Reserve Board have chosen to emphasize policies that stress easier money in the U.S. to avoid a recession, even if that means higher interest rates aren't available as a tool to prop up the dollar.