Explore the vast range of titles available.

Purpose: This article aims to study trade tensions between advanced economies and to express the difference between “currency war” and “trade war” and the respective effects on the global economy‎. Design/Methodology/Approach: The analysis of trade relations between countries is always one of the main concerns of policymakers and economists‎. ‎In this paper‎, ‎interactions Dollar-Yuan‎, ‎Yuan-Euro and Dollar-Euro are modeled using game theory, being the effect of protectionism and currency devaluation in trade tensions studied by introducing a new game defined as threat game‎. Findings: Our findings show that protectionism and negotiation strategy is a credible deterrent threat and can be a brake for a total currency war‎. Also, we use the concept of rational choice to demonstrate that, for advanced economies, the cooperation strategy is the best way to overcome the Covid-19 pandemic crisis. Practical Implications: The subject discussed in the paper refers to issues related to protectionism, currency war and negotiation. The holistic perspective that is applied in this study includes the expression of a dominant strategy in trade relations between countries that helps to prevent the competitive devaluation of money. The consequences of the currency war have been catastrophic for the global economy and have ultimately led to a global depression. It also outlines ways to converge in overcoming the COVID-19 pandemic. Originality/Value: This paper focuses on the prospects for trade relations between advanced economies such as the United States, Europe and China. As a result, the perspective proposed allows us to make a significant and innovative contribution to the literature because it can equip relevant stakeholders in the Global Economic System with the necessary strategies to make efficient decisions.

This article explores the consequences of extremely low real interest rates in a world with integrated but heterogeneous capital markets, nominal rigidities, and an effective lower bound [a zero lower bound (ZLB) for simplicity]. We establish four main results: (1) At the ZLB, creditor countries export their recession abroad, which we illustrate with a new Metzler diagram in quantities; (2) Beggar-thy-neighbour currency and trade wars provide stimulus to the undertaking country at the expense of other countries; (3) (Safe) public debt issuances and increases in government spending anywhere are expansionary everywhere; and (4) When there is a scarcity of safe assets, net issuers of these assets import the recession from abroad.

Intense debate surrounds the effects of trade on voting, yet less attention has been paid to how fluctuations in the real exchange rate may influence elections. A moderately overvalued currency enhances consumers’ purchasing power, yet extreme overvaluation threatens exports and economic growth. We therefore expect exchange rates to have a conditional effect on elections: when a currency is undervalued, voters will punish incumbents for further depreciations; yet when it is highly overvalued, they may reward incumbents for depreciation. We empirically explore our argument in three steps. First, we examine up to 412 elections in up to 59 democratic countries and show that voters generally punish depreciation in the real exchange rate when the currency is undervalued. We also find that at extremely high levels of currency overvaluation, voters sometimes reward incumbents for depreciation. A currency peg, especially in the eurozone, appears to insulate incumbents from these effects. In a second step, we explore the microfoundations of the election results through survey experiments in three advanced industrialized and two emerging market nations with different monetary and exchange rate policies and institutions. Respondents in countries with undervalued to mildly overvalued currencies disapprove of currency depreciations, whereas those facing a very highly overvalued currency favor depreciation. Third, we examine the mechanism of political competition in exchange rate policymaking and demonstrate that sustained undervaluation is rare in countries with strong political competition. Democratic governments have electoral incentives to avoid using undervalued currencies as a means of shielding workers from import competition.

The global order has been dominated by the two economic superpowers: the United States and China. This article attempts to identify the implications of the trade policy followed by the Group of Two1 (G2) for the USD/RMB exchange rate. In this quantitative study, we first estimate models considering only the tariff declarations between the two countries, where a pronouncement on the imposition of tariffs is made. In the following step, in addition to the statements, we also consider determinant variables or variables that influence the fluctuations in the Chinese currency exchange rate, namely, the exchange rate from previous days (t-1 and t-2). Research shows that the beginning of the trade war between the United States and China influenced the depreciation of the latter’s currency. The effect of US declarations on the exchange rate is clearer than the impact of China’s declarations and retaliations, although the estimated models also reveal some impact of Chinese actions.

We analyse the economic conditions (the “shocks”) behind currency movements and show how that analysis can help address a range of questions, focussing on exchange rate pass-through to prices. We build on a methodology previously developed for the UK and adapt this framework so that it can be applied to a diverse sample of countries using widely available data. The paper provides three examples of how this enriched methodology can be used to provide insights into pass-through and other questions. First, it shows that exchange rate movements caused by monetary policy shocks consistently correspond to significantly higher pass-through than those caused by demand shocks in a cross-section of countries, confirming earlier results for the UK. Second, it shows that the underlying shocks (especially monetary policy shocks) are particularly important for understanding the time-series dimension of pass-through, while the standard structural variables highlighted in the previous literature are most important for the cross-section dimension. Finally, the paper explores how the methodology can be used to shed light on the effects of monetary policy and the debate on “currency wars”: it shows that the role of monetary policy shocks in driving the exchange rate has increased moderately since the global financial crisis in advanced economies.

When turmoil strikes world monetary and financial markets, leaders invariably call for 'a new Bretton Woods' to prevent catastrophic economic disorder and defuse political conflict. The name of the remote New Hampshire town where representatives of forty-four nations gathered in July 1944, in the midst of the century's second great war, has become shorthand for enlightened globalization. The actual story surrounding the historic Bretton Woods accords, however, is full of startling drama, intrigue, and rivalry, which are vividly brought to life in Benn Steil's epic account. Upending the conventional wisdom that Bretton Woods was the product of an amiable Anglo-American collaboration, Steil shows that it was in reality part of a much more ambitious geopolitical agenda hatched within President Franklin D. Roosevelt's Treasury and aimed at eliminating Britain as an economic and political rival. At the heart of the drama were the antipodal characters of John Maynard Keynes, the renowned and revolutionary British economist, and Harry Dexter White, the dogged, self-made American technocrat. Bringing to bear new and striking archival evidence, Steil offers the most compelling portrait yet of the complex and controversial figure of White--the architect of the dollar's privileged place in the Bretton Woods monetary system, who also, very privately, admired Soviet economic planning and engaged in clandestine communications with Soviet intelligence officials and agents over many years. A remarkably deft work of storytelling that reveals how the blueprint for the postwar economic order was actually drawn,The Battle of Bretton Woodsis destined to become a classic of economic and political history.

The purpose of this paper is to consider certain consequences of large post-crisis capital flows in advanced economies. Specifically, I offer an examination of the Swiss response to large capital inflows during the early stages of the global financial crisis. Why did the Swiss National Bank (SNB) intervene in the foreign exchange market and introduce an exchange rate floor? Why did the SNB gamble with its highly valued anti-inflationary reputation in attempting to stem the appreciation of the Swiss franc? To answer these questions, this paper suggests a broader and more complete explanation than one that focuses solely on the configuration of domestic interests. Specifically, the paper argues that a thorough explanation of the SNB's response requires accounting for the changing monetary paradigm of the central banking community. This emerging monetary paradigm influenced the SNB's policy decisions by making the SNB particularly sensitive to financial stability risks and by providing it with the policy space to experiment with (macroprudential) tools to manage these risks.

In this paper I discuss some of the most important lessons on exchange-rate policies in emerging markets during the last 35 years. The analysis is undertaken from the perspective of both the Latin American and East Asian nations. Some of the topics addressed include: the relationship between exchange-rate regimes and growth, the costs of currency crises, the merits of “dollarization,” the relationship between exchange rates and macroeconomic stability, monetary independence under alternative exchange-rate arrangements, and the effects of the recent global “currency wars” on exchange rates in commodity exporters.

Purpose – One important assumption in the conventional cooperative game theory is that payoffs are assumed to be deterministic. In terms of the players’ cognitive ability of the realistic world, this is a very strict assumption. The classical game theory can find no way out when a particular game circumstance involves uncertainty, such as limited knowledge, small sample, and inadequate information, the payoff values of the game can only be described with interval grey numbers. The paper aims to discuss these issues. Design/methodology/approach – In this study the concept of N-person grey games is proposed in which payoffs are represented with interval grey numbers opposed to the classical game theory. A straight forward solution methodology is submitted compatible to grey numbers. Then, a currency war between anonymous countries is handled and modeled as an N-Person grey game. A generic currency war scenario is developed to follow the proposed solution procedure thoroughly. Findings – Based on the outcomes of this work, the authors can say that N-person grey game is an expansion of the classical N-person game under uncertain grey information and can be applied in more complex and uncertain environments, such as those seen in complicated currency warfare. Originality/value – This study combines the grey system theory with the classic N-person game theory and sets up the N-person grey game with grey payoff functions. Based on the grey number operating methods, the grey linear programming algorithm is established to calculate and distribute benefits to the players. In this respect this study has the feature of being the pioneer in the N-person grey game area.

This book adopts a nontechnical approach to explaining the basis for trade between countries and the role of firms in global trade and describes the effect of tariffs and fluctuations in exchange rates on a company's sales, costs, and profits The study of international economics has never been more vital than it is today.