Keeps Going and Going and Going....
29 May 2007
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
With both the spunk and the insight of the Energizer Bunny, Sen. Charles Schumer keeps insisting that the value of the Chinese yuan is too low and that this (alleged) fact is a benefit to China (Letters, May 29).
China can lower the value of the yuan against the dollar only by increasing the supply of yuan relative to the dollar - a policy that causes inflation in China. This result hardly benefits the Chinese people or strengthens their economy. Also, by increasing nominal prices in China relative to those in the U.S., yuan inflation ensures that Americans do not buy Chinese goods and services at prices kept artificially low.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281
To the Editor:
With both the spunk and the insight of the Energizer Bunny, Sen. Charles Schumer keeps insisting that the value of the Chinese yuan is too low and that this (alleged) fact is a benefit to China (Letters, May 29).
China can lower the value of the yuan against the dollar only by increasing the supply of yuan relative to the dollar - a policy that causes inflation in China. This result hardly benefits the Chinese people or strengthens their economy. Also, by increasing nominal prices in China relative to those in the U.S., yuan inflation ensures that Americans do not buy Chinese goods and services at prices kept artificially low.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday January 17, 2008 at 4:41pm