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Number of pages / Number of words: |
10 / 2646 |
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Another problem that arises is the assumption that China has the ability to control its exchange rate simultaneously with its inflation rate. When a country holds down its nominal exchange rate, its real exchange rate tends to rise through the effects of inflation, and this has been true of China as large capitol inflows currently create abundant liquidity and are pushing up the rate of inflation...
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When a country holds down its nominal exchange rate, its real exchange rate tends to rise through the effects of inflation, and this has been true of China as large capitol inflows currently create abundant liquidity and are pushing up the rate of inflation. The past decade has seen considerable unpredictability in the inflation rate: almost eight times as much as that in the United States and four times that of Western Europe...
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General points of the essay
China's Exchange Rate
Exchange Rate Movements
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Exchange Rate and Balance of Payments
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Exchange rate policy
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Adjusting China's exchange rate
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