Plaza Accord

In the Plaza Accord of 1985, the G-5 powers (France, Germany, Japan, the United Kingdom, and the United States) agreed to subsidize U.S. exporters by artificially lowering the exchange rate of the U.S. dollar. This had improved the profitability of U.S. manufacturers.

The Plaza Accord and the accompanying monetary expansion in Japan was one of the causes of the Japanese asset price bubble. To bail out the Japanese manufacturing economy, the Reverse Plaza Accord was signed in 1995 and initiated another boom.

Links

 * Explaining Japan's Recession by Benjamin Powell, November 2002
 * Interview with Hiroyuki Okon, Winter 1997
 * The Case Against a New Plaza Accord by James A. Dorn, December 2006