From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sun Jun 17 2007 - 22:15:54 EDT
Thanks Jurriaan. I can (or rather did) see how the opening up of (at least perceived) big differentials in productivity would have huge impact on the exchange ratios of currencies. From the US perspective (and of course the major currency crises have not been suffered by the US or the imperialist countries) also important has been the support provided by the central bank of at least one major exporting power in the stabilization of the dollar (Germany in the 70s, Japan in the 80s, Japan and China today--it seems); it would also seem that one of the major questions in the post hegemonic world Cyrus and others have described is whether such support will be forthcoming. The answer seems to be that as long as it is interest of those presiding over and benefiting from China's export oriented industrialization. Has there been too much support? A concern in the US. At least Strange spoke to the analytical difficulties of fusing economic and political analysis. But perhaps the currency markets have simply outstripped the ability of even coordinated central bank action to stabilize them, much less to manipulate them as in the Plaza Accord? Hegemonic power to dictate the goals of stabilization seems to have waned. This ironically might be in part the result of policy design, viz. the US freeing up of the financial markets. It seems that Strange was asking such questions before she passed away eight or so years ago. Of course Robert Brenner made such politically management of the currency markets the center of his economic analysis. My friend is a pure economist. Rakesh Rakesh > > >Chai-on Lee, Foreign Exchange Rates Determination in the Light of Marx's >Labor-Value Theory >http://papers.ssrn.com/sol3/papers.cfm?abstract_id=499603 > >Susan Strange, What Theory? The Theory In Mad Money >http://www2.warwick.ac.uk/fac/soc/csgr/research/workingpapers/1998/wp1898.pdf
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