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Roach vs Krugman Over China Currency Push

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By Barry Ritholtz - March 19th, 2010, 3:02PM

Stephen Roach, chairman of Morgan Stanley Asia Ltd., talks with Bloomberg’s Susan Li and Paul Gordon from Beijing about the U.S. calls for a stronger yuan. China is conducting stress tests to gauge the effect of yuan appreciation on companies, a sign the government may be preparing for policy change even as it rebuffs foreign criticism of its 20-month dollar peg

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Morgan Stanley Asia Ltd. Chairman Stephen Roach says Paul Krugmans call to push China to allow a stronger yuan is “very bad” advice and that increased Chinese spending is a better way of reducing trade imbalances.

(Source: Bloomberg)

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Category: Currency, Video.

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One Response to “Roach vs Krugman Over China Currency Push”

  1. Jojo Says:
    March 19th, 2010 at 3:17 pm

    Came across this story today:
    ==========
    Be careful what you wish for on currencies
    Mar 19, 2010 08:41 EDT

    The rancorous argument about global payment imbalances and the yuan’s valuation is exposing a surprising and dangerous economic illiteracy among policymakers and commentators.

    Before pressing China to allow a maxi-revaluation of the yuan, western commentators need to think through the consequences carefully. The idea that devaluing the dollar (and by extension euro and yen) will cause payment imbalances to disappear and boost employment in the West with little or no impact on inflation and living standards is a pipe dream.

    http://blogs.reuters.com/great-debate/2010/03/19/be-careful-what-you-wish-for-on-currencies/

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