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July 2, 2007 | How Japan Fuels Global Financial Instability

Thomas Palley: China is not the only Asian economy perpetuating trade deficits. Japan’s rock-bottom interest rates also play a part.

March 18, 2010 | Yuan Versus Dollar

The 21st century will witness new commercial battlefronts: the yuan vs. the dollar  is one of them. ++ Americans blame Chinese officials for maintaining the yuan at an unnecessarily low exchange rate, therefore making it more difficult for the American economy to recover. ++ Responding to a letter written by Congressmen urging retaliation, Wen Jiabao gave a

October 31, 2008 | All Eyes on the Yen

Japan’s central bank has reacted to last weeks rise of the yen as well as to the falling stock market by cutting interest rates. ++ If Japan decides to move towards “zero interest” it would become the “source of almost free money for anyone with an appetite to invest.” ++ The US is faced with a smiliar situtation as the Federal Reserve has also been cutting rates, giving

May 31, 2007 | Bruegel Says Worldwide Exchange Rates Adjustment Would Fight Current Account Deficits

The March 2007 Bruegel Policy Brief reveals that imbalances in global current account positions are not sustainable and need adjustment. A 15% depreciation of the dollar and an appreciation of Asian currencies is needed in order to:

• reduce the US current account deficit,
• faciliate China’s focus on domestic demand and reduce its accumulation of foreign exchange reserves, and
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