Stanford’s Ronald McKinnon, who I cited in my recent Wall Street Journal article on China, echoes my view:
Indeed, as the world goes into a severe economic downturn, the threat of beggar-thy-neighbor devaluations becomes acute — as in the 1930s. Stabilizing the exchange rate between the world’s two largest trading countries could be a useful fixed point for checking the devaluationist proclivities of other nations around the world.
