Everything is Relative

by Don Boudreaux on March 18, 2010

in Monetary Policy, Myths and Fallacies, Seen and Unseen, Trade

Dan Ikenson uses facts to help douse the fiery hysteria over the alleged undervaluation of the Chinese yuan.  Here’s his closing paragraph:

It is doubtful that members of Congress who support action to compel Chinese currency appreciation would proudly announce to their constituents that they intentionally reduced American real incomes. But that is the effect of relative dollar depreciation.

See also this excellent editorial in today’s Wall Street Journal.

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