Listen to a Business English Dialogue About Plaza accord
Sophia: Hi Amelia, have you ever heard of the Plaza Accord in business and finance?
Amelia: No, I haven’t. What is it?
Sophia: The Plaza Accord was an agreement among major economies in 1985 to devalue the US dollar against other currencies to address trade imbalances and stimulate economic growth.
Amelia: That’s interesting. How did the Plaza Accord impact global economies?
Sophia: The Plaza Accord led to a significant appreciation of the Japanese yen and German mark, which helped reduce trade imbalances and promote economic stability.
Amelia: I see. Did the Plaza Accord have any long-term effects?
Sophia: Yes, it contributed to the appreciation of the yen, which fueled Japan’s economic bubble in the late 1980s, followed by a prolonged period of economic stagnation in the 1990s.
Amelia: Wow, that’s quite significant. How do policymakers decide to implement agreements like the Plaza Accord?
Sophia: Policymakers consider various economic indicators, such as exchange rates, trade balances, and GDP growth, to assess the need for coordinated action and negotiate agreements like the Plaza Accord.
Amelia: Thank you for explaining, Sophia. The Plaza Accord seems to have had a far-reaching impact on global economies.
Sophia: You’re welcome, Amelia. Yes, it was a landmark agreement that shaped economic policies and outcomes for many years.