TITLE

'Currency manipulation' and world trade

AUTHOR(S)
STAIGER, ROBERT W.; SYKES, ALAN O.
PUB. DATE
October 2010
SOURCE
World Trade Review;Oct2010, Vol. 9 Issue 4, p583
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Central bank intervention in foreign exchange markets may, under some conditions, stimulate exports and retard imports. In the past few years, this issue has moved to center stage because of the foreign exchange policies of China. Numerous public officials and commentators argue that China has engaged in impermissible 'currency manipulation', and various proposals for stiff action against China have been advanced. This paper considers the relationship between exchange rate policy and international trade, and addresses the questions of whether and how currency manipulation should be addressed by the international trading system. Our conclusions are at odds with much of what is currently being said by proponents of multilateral or unilateral actions against China. In particular, we question whether China's practices can be adjudicated to be 'manipulation' under international law, and doubt that their trade effects can be identified with the degree of confidence necessary to ascertain whether the practices ' frustrate the intent' of WTO/GATT commitments. The difficulty of identifying the trade effects of currency practices undermines the ability of the WTO dispute resolution system to address them, and calls into question the wisdom and legitimacy of unilateral countermeasures that have been proposed in various quarters.
ACCESSION #
54340597

 

Related Articles

  • Menu Costs, Trade Flows, and Exchange Rate Volatility. Lewis, Logan T. // Working Papers -- U.S. Federal Reserve Board's International Fin;2014, Issue 1102, preceding p1 

    U.S. imports and exports respond little to exchange rate changes in the short run. Pricing behavior has long been thought central to explaining this response: if local prices do not respond to exchange rates, neither will trade flows. Sticky prices and strategic complementarities in price...

  • THE DYNAMIC STABILITY OF THE FOREIGN-EXCHANGE MARKET. Britton, A.J.C. // Economic Journal;Mar70, Vol. 80 Issue 317, p91 

    Within the limitations of a simple model of the exchange market, it can be shown that if the exchange rate were left free to find its own level dynamic instability would be a real possibility in the absence of speculation. The market might be expected to clear very rapidly, and the prices of...

  • THE EFFECTS OF REAL EXCHANGE RATE ON TRADE BALANCE IN COTE D'IVOIRE: EVIDENCE FROM THE COINTEGRATION ANALYSIS AND ERROR-CORRECTION MODELS. Herve, Drama Bedi Guy; Yao Shen; Amed, Amzath // Journal of Applied Research in Finance (JARF);Jun2010, Vol. 2 Issue 1, p44 

    This paper investigates the effect of real exchange rate on the balance of trade of Cote d'Ivoire using multivariate cointegration tests and vector error correction models with time series data covering the periods of 1975-2007. Our investigation results confirm the existence of long-run...

  • Estimation Of The Marshall-Lerner Condition For Namibia. Eita, Joel Hinaunye // International Business & Economics Research Journal;May2013, Vol. 12 Issue 5, p511 

    According to the Marshall-Lerner condition, the sum of trade elasticities should be greater than one for a change in exchange rate to have an impact on the country's balance of payments. This paper applies cointegrated vector autoregression to empirically estimate the Marshall-Lerner condition...

  • International Trade and Income in Malawi: A Co-integration and Causality Approach. Matchaya, Greenwell Collins; Chilonda, Pius; Nhelengethwa, Sibusiso // International Journal of Economic Sciences & Applied Research;Sep2013, Vol. 6 Issue 2, p125 

    This paper investigates causal relationships between exports, imports, and economic growth in Malawi over the period 1961-2010. These relationships are examined using the Johansen frameworks for co-integration whereas the Vector Error Correction (VECM) framework is further used to provide...

  • Exchange Rate Pass-Through in the Euro Area. Faruqee, Hamid // IMF Staff Papers;2006, Vol. 53 Issue 1, p63 

    Exchange rate pass-through in a set of euro area prices along the pricing chain is examined in this paper. First, a vector autoregression (VAR) approach is used to analyze the joint time-series behavior of the euro exchange rate and a system of area-wide prices in response to an exchange rate...

  • THE J-CURVE DYNAMICS OF U.S. BILATERAL TRADE. Bahmani-Oskooee, Mohsen; Ratha, Artatrana // Journal of Economics & Finance;Spring2004, Vol. 28 Issue 1, p32 

    Three earlier studies examined the impact of dollar depreciation on bilateral trade between the United States and her six largest trading partners. They used different methodologies that resulted in different outcomes. In this paper we consider 18 major trading partners of the United States and...

  • REPORT EXCUSES CHINA OF CURRENCY MANIPULATION.  // Wood & Wood Products;Jan2007, Vol. 112 Issue 1, p17 

    The article reports that the U.S. government has continued to find insufficient technical evidence that China is manipulating its currency to gain an unfair trade advantage. It has been noted that the annual "Report to Congress on International Economic and Exchange Rate Policies" released by...

  • Exchange Rate and Trade: A Causality Analysis for Pakistan Economy. Hye, Qazi Muhammad Adnan; Iram, Uzma; Hye, Amra // IUP Journal of Applied Economics;Sep2009, Vol. 8 Issue 5/6, p161 

    This paper investigates the direction of causality between exchange rate and trade (exports and imports) for a developing country like Pakistan, utilizing the monthly time series data covering the period 1995-2006. Cointegration and causality tests were conducted to assess the link between trade...

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics