tag:blogger.com,1999:blog-1331441403058020963.post5588162995020142354..comments2024-03-19T07:48:37.771-04:00Comments on International Political Economy at the University of North Carolina: The Downside of a Currency WarThomas Oatleyhttp://www.blogger.com/profile/14092437150746625670noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1331441403058020963.post-47669099440970333082013-02-18T11:06:14.745-05:002013-02-18T11:06:14.745-05:00Anon,
I saw that. Should have linked to it in th...Anon, <br /><br />I saw that. Should have linked to it in the original post, as it is a good example. <br /><br />The point is, when major economies (esp the US) embark on significant monetary policy changes the international effect is profound. The 1980s "Volcker recession" caused by jacking up interest rates also caused a series of financial crises in Latin America. There was a significant monetary tightening in the US right before the E Asian currency crises in the 1990s too, although the causal relationship is a bit less clear there.<br /><br />You get the idea. US monetary policies have global effects.Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-46370866450098305592013-02-17T23:03:45.330-05:002013-02-17T23:03:45.330-05:00The guy at ipezone had an interesting post about s...The guy at ipezone had an interesting post about some turbulence in South Korea in response to the yen: http://ipezone.blogspot.com/2013/02/south-korea-declares-intl-currency-war.html<br /><br />Samsung and Hyundai's competitiveness down, investors already fleeing due to the perceived spectre of "competitive devaluation". Not a very rosy picture.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-348122263568380622013-02-16T15:26:17.572-05:002013-02-16T15:26:17.572-05:00Theo,
That, obviously, is a normative question. ...Theo, <br /><br />That, obviously, is a normative question. The point I'm trying to make (as Anon noted) is that not everyone would benefit. Yglesias and Krugman and others are ignoring that. <br /><br />Vladimir, <br /><br />Some national governments will have the appropriate policy tools to deal with this. For example, countries with external surpluses and lots of foreign exchange can burn through some of it. This is what Saudi Arabia did during the Arab Spring: they essentially bribed the country to not have a revolution. But not every country is in a position to do that. <br /><br />You are also correct that certain segments within societies will benefit while others suffer. But this is not necessarily a good thing from the perspective of political stability.Kindred Winecoffhttps://www.blogger.com/profile/14330671232391851377noreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-1405245020577000252013-02-16T13:26:33.141-05:002013-02-16T13:26:33.141-05:00Theo - your question does nothing but buttress Kin...Theo - your question does nothing but buttress Kindred's main point - that "currency wars" are not positive-sum, and that the effects of QE/central bank interventions do have ramifications outside of the rich white countries club (in this case, yes, the "dollar" price of food).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-28251955628640653332013-02-16T09:15:20.404-05:002013-02-16T09:15:20.404-05:00This post ignores that the systematic effects can ...This post ignores that the systematic effects can be mitigated by national governments. We have to understand what options are available to governments and why they don't take specific policy steps to mitigate the harm. In this case domestic political economy is obviously important. I don't really know anything about Brazil, but when I hear Brazilians complain about currency wars I immediately think it's about promoting their manufacturing sector. Surely they benefited in some way from increasing commodity prices, being a commodity exporter. Second, we don't necessarily know how rising food prices affect the global poor. Perhaps bad for people living in cities but for those in rural areas with the ability to produce their own food less so. Vladimirhttp://cirovskiv.blogspot.comnoreply@blogger.comtag:blogger.com,1999:blog-1331441403058020963.post-63676941985079554982013-02-16T08:15:05.643-05:002013-02-16T08:15:05.643-05:00So the Fed should unnecessarily impoverish America...So the Fed should unnecessarily impoverish Americans in order that the world *dollar* price of food go down?Theo Cliffordhttps://www.blogger.com/profile/07724346333552279470noreply@blogger.com