Chinese-U.S. Exchange Rates and Knowledge Capital Flows: Why We Feel Poorer

The short summary: The Chinese policy of buying dollars can be best understood as an indirect purchase of U.S. knowledge capital–technology and business know-how. That, in a nutshell, is why we feel poorer today. Unless the Obama Administration understands the link between the undervalued yuan and the global flows of knowledge capital, negotiations with China are doomed to [...]