Demanding devaluation
Subtitle: exchange rate politics in the developing world
By: David A. Steinberg
Series: Cornell studies in money; Cornell studies in money
Publisher: Cornell University Press
Published: 2015
Place of publication: Ithaca; London
Language: eng
Number of pages: 273
ISBN-13: 9780801453847
Subjects: Foreign exchange rates
Description: 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. In Demanding Devaluation, David Steinberg argues that the demands of powerful interest groups often dictate government decisions about the level of the exchange rate. Combining rich qualitative case studies of China, Argentina, South Korea, Mexico, and Iran with cross-national statistical analyses, Steinberg reveals that exchange rate policy is heavily influenced by a country's domestic political arrangements. Interest group demands influence exchange rate policy, and national institutional structures shape whether interest groups lobby for an undervalued or an overvalued rate. A country's domestic political system helps determine whether it undervalues its exchange rate and experiences explosive economic growth or if it overvalues its exchange rate and sees its economy stagnate as a result.--
Notes: Includes bibliographical references and index.
Table of contents: title: A conditional preference theory of undervalued exchange rates; title: Cross-country patterns in exchange rate policy and preferences; title: Why China undervalues its exchange rate: the domestic politics; title: Of currency manipulation; title: The political appeal of overvaluation: industrial interests and the repeated overvaluation of the Argentine peso; title: Interests, institutions, and exchange rates in South Korea, Mexico and Iran.