 Is There a Global Currency War?Entrepreneurial Business and Economics Review, 2014, vol. 2, issue 2, 21-30 Abstract: The main aim of this article is to identify factors influencing the direction of change in exchange rates and to assess whether it is justifiable to use the term “currency wars” to describe such activities. The mainforms of such “currency wars” in contemporary global economy have been characterized and their impact on financial markets and national economies has been analyzed. The method chosen for verification of the hypothesisis the critical analysis of existing literature regarding currency wars. The article also takes advantage of the experiences connected with exchange rate fluctuations in several developed and developing countries in the years 2000-2014. The cases subjected to analysis include changes in currency markets in the USA, Eurozone, Great Britain, Switzerland, Japan, and China. Both parts of the hypothesis have been confirmed. In the conditions of free capital flow, emerging markets and their financial marketsare especially vulnerable to the introduction and removal of tools in the frameworkof a currency war. It is difficult not to notice that China, the biggest trade partner and the regional competitor to Japan, did not protest publicly against the policy of weakening the yen. On the other hand, one should underline that one should not expect protests from the country which pursues a similar strategy, albeit by means of other instruments and tools. Only the biggest central banks can afford to participate in a currency war, which might provide transient advantages, whereas emerging markets are on the losing side, both in the period of implementation of currency war tools and in the period of their removal. The paper adds to the literature by combining concepts and presenting them as one multidimensional problem. Keywords: currency wars; financial markets; depreciation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:krk:eberjl:v:2:y:2014:i:2:p:21-30 Ordering information: This journal article can be ordered from Access Statistics for this article Entrepreneurial Business and Economics Review is currently edited by Krzysztof Wach, PhD, hab. More articles in Entrepreneurial Business and Economics Review from Centre for Strategic and International Entrepreneurship at the Cracow University of Economics. EBER Journal Cracow University of Economics Faculty of Economics and International Relations Centre for Strategic and International Entrepreneurship ul. Rakowicka 27 31-510 Krakow Poland. Contact information at EDIRC. |
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