A conditional preference theory of undervalued exchange rates -- Cross-country patterns in exchange rate policy and preferences -- Why China undervalues its exchange rate: the domestic politics -- Of currency manipulation -- The political appeal of overvaluation: industrial interests and the repeated overvaluation of the Argentine peso -- Interests, institutions, and exchange rates in South Korea, Mexico and Iran
Summary
Exchange rate policy has profound consequences for economic development, financial crises, and international political conflict. Some governments in the developing world maintain excessively weak and undervalued exchange rates, a policy that promotes export-led development but often heightens tensions with foreign governments. Many other developing countries overvalue their exchange rates, which increases consumers' purchasing power but often reduces economic growth. This book argues that the demands of powerful interest groups often dictate government decisions about the level of the exchange rate
