The United States has apparently changed its dollar policy. At the weekend before last, U.S. Treasury Secretary John Snow pointedly excluded the traditional measure of strength -- the dollar's value against other currencies -- when asked to define what "strong" meant. While a spokesman added that there has been no change in policy, Mr. Snow's remarks do signal a departure from a longstanding U.S. economic strategy.

The rationale for the move is clear: A weakened dollar should boost the economic prospects for U.S. exporters. There is danger as well, however. Dollar depreciation will strengthen currencies of other countries, such as Japan, and weaken their economic prospects. The move could also diminish the attractiveness of the U.S. to foreign investors, raising the cost of capital in the U.S.

For nearly a decade, the U.S. has supported a strong dollar. The knowledge that Washington wanted a currency with a high market value encouraged foreign investors to put their savings in the U.S. The flow of funds kept U.S. interest rates low, stimulating borrowing by American businesses. Those investments also financed U.S. consumption, since American consumers spend more money than they save. (The decision to invest in the U.S. was not merely a favor granted: The investments earned better returns than elsewhere in the world, and the funds underwrote purchases of foreign goods, often from the investors' own economy.)