His "America first" slogan is nothing less than a beggar-thy-neighbor policy
Abe's beggar-thy-neighbor policy
is leading Japan up a blind alley, where it will be a pariah in the international community.
"This is the strongest proof that currency undervaluation, especially for a large country, is a beggar-thy-neighbor policy
," he says.
Longer-term, the pure fiat money system exposed the rest of the world to what Steil and Hinds (2009: 200) term a monetary conflict of interest within the Fed: "The money it creates is both a domestic currency and international one, and the objectives of each of the aspects of the dual role can and frequently do clash." The legacy today is a Fed policy that is increasingly viewed as a beggar-thy-neighbor policy
to gain competitive advantage for its exporters.
Using the renminbi to settle China's international trade accounts would help China escape America's beggar-thy-neighbor policy
of allowing the dollar's value to fall dramatically against trade rivals.
It is useful to recall the state of the world economy during the great depression and the destructive trading situation, often referred to as the beggar-thy-neighbor policy
. This policy of then mostly developed countries consisted of imposing protective tariffs in hope that this would stimulate the depressed internal conditions.
Because foreign producers lose out under this import tariff, it is sometimes called a beggar-thy-neighbor policy
Countries employed another, seemingly only slightly less pernicious beggar-thy-neighbor policy
during the Great Depression.
Germany is accused of pursuing a beggar-thy-neighbor policy
. This is rubbish.
If this target were implemented, the yen might weaken, but this would not be evidence of a beggar-thy-neighbor policy
but rather--as emphasized by Lars Svensson (2003) at Princeton--as part of an effort to anchor expectations in a way consistent with reflation.
The temptation in this type of recession, however, is to use the beggar-thy-neighbor policy
by devaluing the currency.