Krugman On The RMB — Problem Identified, But What About The Solution?

2009-10-23

China’s bad behavior is posing a growing threat to the rest of the world economy. The only question now is what the world — and, in particular, the United States — will do about it. (New York Times)

Economist Paul Krugman devoted his latest column to a discussion about the RMB and the need for revaluation. His description of the problem seems spot on to me, and it sounds like Krugman pretty much agrees with Bernanke's ideas about China's purchase of dollar assets, particularly mortgage-backed instruments, and the effect on US interest rates and the financial crisis in '08 – I like Bernanke on this topic as well.

My only criticism of the column, such as it is, concerns solutions.
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