An Economic Thought about How to Detect Currency Manipulation

Jeong Eui Suh ()
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Jeong Eui Suh: The Bank of Korea

Economics Bulletin, 2020, vol. 40, issue 2, 1486-1497

Abstract: Criteria listed in the US Treasury Report to detect currency manipulation of major trading partner countries are necessarily ad hoc. In this paper, a simple economic-thought-based measure has been developed linking Fisher equation and CIRP with keeping implications of the impossible trinity in mind. Results of applying the measure to actual data do not seem to support the suspicion that major trading partner countries of the US might be manipulating their currencies until recently. Although further endeavors should be warranted in the case of China, even its currency practices seem to have been enhancing since 2012.

Keywords: Currency manipulation; Fisher equation; Covered interest rate parity (search for similar items in EconPapers)
JEL-codes: F3 F4 (search for similar items in EconPapers)
Date: 2020-06-02
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