chapter 1 why china works
chapter 2 a changed global reality
chapter 3 time to rebalance
chapter 4 the incredible shrinking europe
chapter 5 japan goes from dynamic to disheartened
chapter 6 goodbye, free trade?
chapter 7 can detroit be retooled —— before it's too late?
chapter 8 the decade of steve
chapter 9 beyond bretton woods 2
chapter 10 the alchemists of finance
chapter 11 among the fringers
chapter 12 global m&a
chapter 13 the business of making money
chapter 14 patagonia: blueprint for green business
On the other hand, if some countries intervene unilaterally, nominal exchange rates areaffected; goods priced in the currency of those countries become cheaper when purchasedwith dollars. The experience of the 1930s shows that this sort of situation breeds tradedisputes and can trigger a protectionist response.
So what can be done to discourage the U.S. from retaliating against countries that pushdown the value of their own currencies？ The most important tool for resisting protectionistsentiment in the 1930s was a monetary policy that promoted economic growth. Such policiesworked during that era, when prices were falling and unemployment was unusually high,and the situation is similar today, if not as extreme. If fears of deflation were to subside andemployment were to expand more rapidly, the pressure for a protectionist response fromWashington would dissipate. When the economy is performing well, currency disputesbecome background noise 2.