Dollar to Fall Further, Nobel Laureate Warns
American Robert M. Solow, the Nobel laureate for economics, said Monday that the U.S. dollar is still searching for its proper value and is likely to continue falling.
Solow, honored for his theories of economic growth, also said America’s trading partners should expand their economies to help the United States resolve its trade imbalance.
Solow, a professor of economics at Massachusetts Institute of Technology, and the other seven Nobel Prize winners who will receive their awards in Stockholm on Thursday met prize committee members and reporters on Monday.
President Oscar Arias Sanchez of Costa Rica, who was awarded the Nobel Peace Prize for his Central American peace plan, is scheduled to arrive in Oslo today. The Peace Prize is the only Nobel award given in the Norwegian capital.
Solow said the depth of the dollar’s fall will depend on some of America’s biggest trading partners: Japan, West Germany, Taiwan and South Korea.
“The dollar’s value some months ago was obviously too high for international equilibrium. It seems unlikely to me that the dollar has yet reached an equilibrium,” he told reporters.
Solow, born in Brooklyn, N.Y., said a further depreciation of the dollar and growth in the economies of the trading partners could bring the U.S. balance of payments into line. The alternative, he said, is recession.
Musing on his personal economic situation, Solow said he does not mind paying income tax on the prize money under an amendment to U.S. law that goes into effect this year for U.S. Nobel Prize winners. Each prize is worth 2,175,000 Swedish kronor, or about $365,000.
“A doughnut has cake and it has a hole. It’s not wise to concentrate only on the hole,” Solow said of the tax he expects to pay. The news conference was held at the Swedish Royal Academy of Sciences.
Solow and chemistry prize winners Donald J. Cram of UCLA and Frenchman Jean-Marie Lehn agreed that protection of the environment is one of science’s chief goals.
Pay for Clean Environment
Solow suggested that the cost of disposing of goods should be included in their price. That would encourage a drop in consumption and would provide a greater incentive to find less expensive ways to dispose of the waste safely.
Cram said scientists are searching for catalysts to break down waste in water. Speaking of waste, Lehn stressed that the “first thing is not to dump it” and added that “one has to pay” for a clean environment.
Sharing the chemistry prize with Lehn and Cram was Charles J. Pedersen, 83, of Salem, N.J., who retired 19 years ago as a research chemist. They were honored for making relatively uncomplicated artificial compounds that imitate the function of natural proteins.
The physics prize went to J. Georg Bednorz of West Germany and K. Alex Mueller of Switzerland, who worked at the IBM Zurich Research Laboratory on new superconducting materials that could lead to cheap electricity, speedier trains and faster computers.
Exiled Soviet poet Joseph Brodsky, the Nobel laureate for literature, told a news conference Sunday that he hoped that winning the prize would help him win permission to visit the Soviet Union for the first time since leaving in 1972. He now is a naturalized American citizen living in New York.