中美汇率争议frankel.pptVIP

China-USCurrency Issues Jeffrey Frankel Harpel Professor Revised from CLD Program, June 8, 2010;CHINA FUTURE LEADERS, 10 a.m., Bell Hall, January 17, 2011 Topics to be covered (I) Historical timeline of exchange rate diplomacy (II) What is in China’s interest? (III) What is in the interest of the US Rest of World? (IV) Shifting power relationships Appendices: U.S. Treasury biannual reports on currency manipulation The current account imbalances The internationalization of the RMB Technical appendices Historical timeline of currency diplomacy 1973: End of Bretton Woods era. Major currencies switch from fixed to floating. The rest keep their pegs. 1977: IMF members agree that each shall “avoid manipulating exchange rates … in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members.”  [Principle (A) of the “1977 Decision on Surveillance over Exchange Rate Policies,” and Sect.1, Clause 3, of Article IV amended in 1978.] In practice, the IMF almost never pressures countries to revalue their currencies upward; It just pressures deficit countries to devalue. 1983-84: ￥/$ Agreement. 1985: Plaza Accord. Japan, US others cooperate to bring down overvalued $, esp. vs. ￥  1987-89: Louvre Agreement: $ depreciation halted. Big bubbles in Japan’s equity real estate markets, followed by crash, severe Japanese stagnation in 1990s. Timeline, continued 1988: The Omnibus Trade  Competitiveness Act mandates the US Treasury report to Congress biannually on whether trading partners were manipulating currencies.  Section 3004 requires the Treasury to “consider whether countries manipulate the rate of exchange between their currency and the US $for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade. The US must hold talks with governments deemed to be breaking rules.  In the first Reports to Congress