Sunday, January 21, 2007

The Yuan, Ricardo's Law and Vendor Financing

1/21/07 This chart is from the China Currency Coalition website. My interpretation is that the orange line represents what a hypothetical yuan exchange rate would be based on Ricardo's law. The blue line is the actual result of what some people call China's currency manipulation or what others might call vendor financing. Its kind of hard for me to decide which is better: 1) the potential "future" benefits of higher employment and higher standard of living with an unpegged yuan or 2) cheap foreign imports "now?"


Post a Comment

Subscribe to Post Comments [Atom]

<< Home