a A higher real exchange rate signifies a real depreciation of the local currency.

Beggar Thy Currency Or Thy Self?

This reflected a decrease in real terms, due to inflation and the devaluation of the dollar.

In Algeria, real depreciations appear to have been accompanied by constant real wages and falling labour productivity.

Of course, the renminbi s recent depreciation was much smaller than the de facto currency devaluations engineered by the United States and the United Kingdom after the financial crisis of 2008. It was also nowhere near as significant as the devaluation that the Bank of Japan has pursued since 2012.

Devaluation of the currency.

China s Daring Depreciation

Thus, trade liberalization in these countries was initially accompanied by real currency devaluations to avoid a sharp deterioration in the balance of payments.

Given these factors, it seems likely that the recent devaluation was driven by a different goal. And, in fact, an announcement made on the same day as the devaluation one that has been largely overshadowed by the panic offers an important indication of what that goal was.

The first answer, of course, is that the trade weighted dollar has fallen by more than 15 in real terms since its peak in early 2002. Yet the US deficits have persisted, and even risen, since then.

Take the same country s current account deficit and ask how large a real depreciation is needed (making some assumptions about trade elasticities along the way) to close that external gap. If the recent real depreciation achieves that threshold, no further change in the exchange rate should be expected.

20. The national currency was devalued.

This is the craft that was going on, but there are a few collectors who also collect art which can depreciate.

But there is a more fundamental point From an economic viewpoint, currency manipulation or unfair undervaluation are exceedingly hard to pin down conceptually. The renminbi's slight depreciation against the dollar in 2014 is not evidence of it many other currencies, most notably the yen and the euro, depreciated by far more last year.

But these countries real economies would benefit from a furlough from the eurozone. Depreciation inside the eurozone in the form of deflation, on the other hand, would drive large parts of the real economy into excessive debt, because only the value of assets, not that of bank debts, would decline.

These countries, too, are facing a recession, and, while the interest rate has not yet reached its zero bound everywhere, incentives to depreciate might grow in the near future. In fact, the incentives are already there.

In fact, while the dollar depreciated during the last half of 2003, resulting in huge exchange gains in 2003, during the first five months of 2004, the dollar appreciated by 3 per cent against the euro and other major currencies.

There are three options for restoring competitiveness within the eurozone, all requiring a real depreciation and none of which is viable

Both act as a wealth levy inflation means that bondholders suffer a real loss in proportion to their wealth and the size of the devaluation. If taxes on capital are not adjusted, holders of domestic stocks suffer a comparable loss.

When the dollar falls in value, as it has, Ukraine s very open economy imports inflation. In the last year, the dollar s value dropped by 12 against the euro, which is a more important currency than the dollar in Ukraine s foreign trade.

When the dollar falls in value, as it has, Ukraine s very open economy imports inflation. In the last year, the dollar s value dropped by 12 against the euro, which is a more important currency than the dollar in Ukraine s foreign trade.

In fact, as China pursues structural reforms aimed at ensuring its continued development, forced depreciation is about the last thing it needs. It would also be highly problematic for the global economy.

Since the implementation of the new exchange reform, the previous appreciation state of RMB was changed. The central parity rate of RMB exchange rate in one year was about 8 .

15. The national currency has stabilized, depreciating by 1.5 per cent against the United States dollar in 1997, which resulted in a real appreciation of 3 per cent. Credit growth has been strong.

In fact, while the US dollar depreciated during the last half of 2003 resulting in huge exchange gains in 2003, during the first five months of 2004, the US dollar appreciated by 3 per cent against the euro and other major currencies.

A Devaluation Option for Southern Europe

This presents a decrease of some 30 per cent in the value of the United States dollar against the euro.

Another obstacle was the problem of sunken cost.

But that is logically flawed even with deflation, real purchasing power would fall, and the real value of debts would rise (debt deflation), as the real depreciation occurs. More importantly, the exit path would restore growth right away, via nominal and real depreciation, avoiding a decade long depression.

That's just what this Soule's figuring on running it right down to nothing.

But some depreciation of the euro would provide a bridge to reach internal governance reform. And, like it or not, rising pressure on the euro is likely to force European officials to cross it.

You write the check, and instantly it depreciates 30 percent.

The value of the dollar declines as the rate of inflation rises.

I'm going to criticize your work with a baseball bat.

Since then, many calls for coordination have lamented the outbreak of currency wars, otherwise known as competitive depreciation an old phenomenon that recalls the tit for tat devaluations of the 1930s. Now, as then, the fear is that if all countries try to depreciate their currency to gain export competitiveness and boost their economies, all will fail.

These are reasonable objections, but they should not be allowed to lead to unreasonable conclusions. The alternatives on offer are internal and external devaluation.

One need not be an economist to figure out that, while all currencies can (and do) depreciate against something else (like gold, land, and other real assets), by definition they cannot all weaken against each other. In order for some currencies to depreciate, others must appreciate.

The won has been devalued sharply, making exports more viable.

You enjoy making a person look like two cents, don't you?

He made Jiggs feel like two cents, me even less.

The nominal increase translated into a significant decline of actual resources available, primarily due to the impact of the depreciation of Usthe United States dollar against the secretariat's functional currency, the Euro.

But the euro s depreciation is too recent to have made much difference yet. Historical evidence, not to mention Japan s experience with a falling yen, suggests that it takes several quarters, or even years, before the positive impact of currency depreciation on net exports is felt.

But, while it is true that such expansionary policies can have a recessionary impact on other economies, modern international finance theory shows that the concept of a currency war is a myth. The reality is that, under a flexible exchange rate regime, competitive devaluations do not produce undesirable imbalances.

Or a weaker euro could be had if the ECB were willing quite unlikely to ease monetary policy further to allow real depreciation. But a weaker euro would not eliminate the need for structural reforms otherwise, the benefits would go mostly to countries like Germany that undertook painful reforms to restore competitiveness via a reduction in relative unit labor costs.

The moribund Italian economy would spring to life if the euro fell by 30 , adjusted for inflation. In 1997, South Korea s economy took a nosedive, and 1998 was still difficult, but GDP soared by 11.1 in 1999.