mundell-china-should-have-a-fixed-exchange-rate

Mundell: China should have a fixed exchange rate

Nobel-prize winning US economist says China should not bow to American pressure to allow its currency to appreciate.
Nobel Laureate economist Robert Mundell says China should fix its currency against the US dollar, in a move that would contradict growing international pressure for greater exchange rate flexibility.

Mundell, a Columbia University economics professor who won the Nobel prize in 1999, says US concerns over a growing trade deficit are ômisdirectedö, and that a fixed exchange rate is a ôviable monetary policyö for China.

Speaking at Asian InvestorÆs inaugural ôAsian Investment Summitö in Hong Kong, Mundell says adopting a ômore flexible exchange rateö - that appreciated considerably, say 25% - is not in ChinaÆs interest, and that it would bring about huge problems, including further destabilising a banking system beset by bad loans, cause...
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