Beijing Guides the Yuan Higher

choi

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(1) Lingling Wei, Beijing Guides the Yuan Higher; A Stronger yuan puts downward pressure on inflation and buoys its case as a global currency. Wall Street Journal, Sept 27, 2011.
http://online.wsj.com/article/SB10001424052970204422404576594490222289126.html

My comment:
(a) There is no need to read the report.
(b) It is unclear for the moment about Beijing's motive. To fight inflation or to appease US Congress?
美国参议院将就中国操控人民币汇率投票. VOA Chinese, Sept 27, 2011
http://www.voanews.com/chinese/news/20110927-US-CHINA-BILL-130616693.html
(c) Background: Due to recent turmoils (in Euro zone, world stock markets etc), investors around the world seek safe haven, driving up yen and US dollar (despite many economic problems in Japan and US). Many other currencies, including Taiwan dollars, lose value. Without intervention, renminbi would depreciate also. Oddly, China moves to strengthen renminbi, and that is news.

(2) Holman W Jenkins Jr, Chicago Economics on Trial. The Weekend Interview with Robert Lucas.  The Nobel-winning economist on the high cost of the welfare state, why he voted for Barack Obama, and how Milton Friedman changed his life. Wall Street Journal, Sept 24, 2011.
http://online.wsj.com/article/SB10001424053111904194604576583382550849232.html

Quote from two consecutive paragraphs:  

"Two things are on his mondand they're connected. One is the failure of the European and Japanese economies, after their brisk growth in the early post-war years, to catch up with the US in per capita gross domestic product. The GDP gap, which once seemed destined to close, mysteriously stopped narrowing after about 1970s.

"The other issue on his mind is our own stumbling recovery from the 2008 recession.

My comment:
(a) In economics, there was Vienna school. Austrian School
http://en.wikipedia.org/wiki/Austrian_School
(influential in the late 19th and early 20th century)
(c) In modern times, economics is roughly divided into Keynesian and Chicago school, of which Milton Friedman was a leader.
(d) There is no need to read the interview.


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