Quote:
Originally Posted by kirakira
What are you talking about? Print money to manipulate exchange rate? Sir do you have any idea how macro economics work? If you print money, eventually the cost of material and labour also goes up, you have to jack up the price to make a profit because your cost to produce goes up as well. Now you have to charge more yen for the same good so you are back to square one.
What you are saying is pay your workers less to reduce your cost so you can lower your price. Well duh, just pay them less instead of inflate. Much less damaging to the economy.
If devaluing the yen is all you want, then all you need is to do what the Chinese do to devalue the yen without creating all these problems associated with printing money such as inflation. Inflation isn't a good thing not to mention u need to jack up the interest rate sky high to contain it.
RMB is a managed float, it is not a free float currency and there are restrictions on how much RMB a person can buy. Its just a big open secret that it has been kept artificially low.
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I’m majoring in economy, thanks.
In the last decades Japan held one of the lowest inflation rate of all the industrialized countries.
Even if uncontrolled inflation is bad for an economy, controlled inflation is sometimes necessary to reajust unfavorable macro trend.
Devaluate the money, increase liquidity, prevent unemployment, diminish the domestic debt.
In the short term, it can even incite people to invest their saving in fear of seing a devaluation of the money.
In this particular situation, the benefits outweight the losses.
Every major economies manage their currency, the difference is that China use limited floating band.
Using such limitation wouldn’t necessarily devaluate the JPY, it would only stabilize it. It could even limit it’s potential depreciation.
Do you pretend to know better what is best for Japan than the Japanese government itself ?
Japanese economists knows what they are doing.