Current Account Imbalances and Exchange Rates
April 07, 2010 at 09:27 AM EDT
The debate on the possible undervaluation of the Chinese Renminbi is in full force among politicians and academics. Most agree that the Renminbi is undervalued but there are disagreements on the effects of exchange rate misalignments (are they they ultimate cause of current account imbalances?). Are exchange rate misalignments the main cause of current account imbalances? [...]