Ultimately, Japan was caught in an uncomfortable position: cooperate and intentionally appreciate the yen in a time when Japan was heavily export driven, or fail to cooperate and lose access to a massive market. Continue Reading
The international cooperation achieved at the Plaza Accord is not possible in the more decentralized global economy. The rise of emerging markets and their inclusion in the G20 makes dialogue extremely difficult, while the back-seat role fiscal policy has taken hinders the creation of any meaningful global fiscal reform. Continue Reading
The currency is not a simple exchange value, but incorporates more complex issues including politics and culture. Continue Reading
The Plaza Accord remains more pertinent than ever in identifying a successful example of currency policy coordination in which major financial leaders gathered to help decline the value of the dollar, thus stabilizing the international economy. But historical success does not prove that such monetary and fiscal action will work in the future. Continue Reading
The recently proposed Trans-Pacific Partnership, a trade agreement between the U.S., Japan and 10 other Pacific nations, lacks logistically sound reform and therefore blurs foresight of future exchange rates and of how future trade will affect American citizens. Continue Reading
China has recently made a push for their currency to be included in the International Monetary Fund’s Special Drawing Rights, a step towards becoming a world reserve currency. But despite recent uncertainty about the state of U.S. debt, the dollar, in the form of U.S. Treasury bonds, remains the safest and most liquid asset available to emerging economies. Continue Reading
Between the events following the Plaza Accord and developments surrounding the Greek financial crisis, perhaps it could be said that active international cooperation regarding economic relations tends to only work in the short run. Continue Reading