FE Editorial : Currency wars
First, the yen’s weakening vis-a-vis the euro or the dollar looks more like a reversion to mean than a currency attack with the value now reverting to 2010 levels after a sharp appreciation in the years before. From 100 yen to the dollar in January 2008, the yen appreciated all the way to 77.5 in January 2012 and is now back to 90. Two, given the role of monetary easing in getting back economies like the US on track, some of what looks like competitive devaluation was probably necessary.
But a reversion-to-mean and beggar-thy-neighbour, as China did in the run up to the east Asian crisis, are two different things. Indeed, a competing perspective on the US mortgage crisis is that it wasn’t so much US consumers
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