The Chimera of Currency Manipulation

The Chimera of Russia s Gas Power

Or use an active tension cords to make it move forward and backward. It's called ChIMERA.

The economist Jeffrey Frankel has called currency manipulation a chimera, declaring that linking efforts to prevent currency manipulation to trade agreements has always been a bad idea, and it still is. He is right.

Nobody, it appears, can put Humpty Dumpty Iraq together again. But it will require courage to acknowledge what is occurring before our eyes, rather than continue to grasp at the chimera of a consolidated Iraqi state.

To be sure, a fiscal union such as that in the United States is a distant prospect that eurozone leaders should not expect to achieve any time soon or even in their lifetimes. But that does not mean that establishing a fiscal union is a chimera.

Clearly, interdependency cannot be avoided nor can the responsibility than it entails. The idea that, when the going gets tough, an EU country can solve all of its problems by reverting to pure national sovereignty is an intellectual fallacy, a political chimera, and thus a source of considerable social frustration.

Interest rates, employment, aggregate demand, and technological and institutional innovation all play a role. As the economist Joan Robinson pointed out in 1947, just about any exchange rate will be the equilibrium value for some combination of these other variables. The equilibrium exchange rate, she famously argued, is a chimera.

Of course, global citizenship will always be a metaphor, because there will never be a world government administering a worldwide political community. But the more we each think of ourselves as global citizens and express our preferences as such to our governments, the less we will need to pursue the chimera of global governance.