The dollar has declined by 13 percent against the euro this year, a development that makes U.S. exports cheaper on world markets and European exports more expensive. One influential U.S. research organization says the dollar needs to decline further.

U.S. manufacturers are applauding the dollar's decline, saying it not only makes it easier to compete abroad, but gives U.S. firms a break against imports in the U.S. market. The chief economist at General Motors says the cheaper dollar has substantially improved his company's competitive situation.

Fred Bergsten, the head of Washington's Institute for International Economics, similarly applauds the dollars' decline. But Mr. Bergsten says a further 10 to 20 percent dollar decline is needed to achieve balance in the global economy.

"The dollar started coming down in February 2002 after a six-and-one-half-year run-up. It has come down now by a trade-weighted 10 percent. That is roughly half of what most of us around here think is necessary. The ideal would be another year of gradual decline."

Another Institute researcher, former International Monetary Fund chief economist Michael Mussa, wonders why the Bush administration repeats the rhetoric of the Clinton administration in favor of a strong dollar.

"When [then Treasury Secretary] Bob Rubin was enunciating it in April 1995, the dollar was at its all time low, an exchange rate in nominal terms, if you extend it to the euro, of about $1.46," he said.

The dollar currently trades for about $1.18 to the euro.

Mr. Mussa says when the dollar was still relatively weak against other currencies in the late 1990s it was useful for U.S. officials to speak in favor of a strong dollar.

"But that situation changed after the middle of 2000," he explained. "And since that time, from a short-term macro perspective of growth and inflation, having such a strong dollar has not made so much sense."

Mr. Bergsten says the impact of the dollar devaluation is limited largely to Europe as several Asian currencies, most notably that of China, are linked to the dollar and have also recently declined. Thus China, like the United States, is receiving a competitive boost on world markets.