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prescribed a devaluation to the health of the economy

By Ethan Smith

BEVERLY HILLS-The economist Nouriel Roubini recommended a devaluation of the currency as the key to encouraging the growth of economies like the U.S. Europeans and Japanese, in a speech at a conference on Monday. Roubini

recognized that the simultaneous devaluation of the three major currencies against the Chinese renminbi and other currencies is probably difficult to achieve.

reduce the value of the dollar against China's currency would help boost U.S. exports relatively less expensive to return them to China. The devaluation of the dollar could also slow Chinese imports from the U.S., making them relatively more expensive in dollar terms.

However, in a heated discussion, David Rubenstein of Carlyle Group argued that a strong dollar had historically been the backbone of the U.S. economy, given that the dollar became the world's main reserve currency. "For most of the twentieth century had a strong dollar and we were the dominant economy in the world," said Rubenstein.

Roubini, a professor at the Stern School of Business at the University of New York, responded by noting that the reserve currency was a "curse" for the U.S., allowing the nation to create budget deficits longer than they would been otherwise. "

The comments came in a panel discussion at the annual conference Milken Institute Global. The panel was moderated by Paul Gigot of The Wall Street Journal.

A Roubini is credited with anticipating the U.S. mortgage crisis, the problems of mortgage-backed securities worldwide and the resulting financial crisis.

Source: WSJ