2010年10月1日,英国《经济学家》杂志发表了《Paul Krugman, seriously》的文章,对克鲁格曼主张,由美国国会众议院发动的贸易战来压迫人民币升值的前景表示忧虑。陈平当即作出评论,指出贸易战的实质不是贸易平衡,而是美国寻求免费午餐来降低其债务水平,同时维持美元的霸权。而贸易战的结果将是美国失去国际金融市场的领导地位。
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Paul Krugman completely distort the essence of American war in exchange rate. Theoretically speaking, there is no operational model could identify the equilibrium exchange rate. At one extreme, there is the simplest model of ppp, which may be applied to a long-run about 5 to 10 years(?). At the other extreme, the random walk model rules out the possibility of forecasting exchange rate. Empirical analysis shows that exchange rate movements are more sensitive to interest rate and debt default risk than trade imbalance. Historically, Japanese Yen and German Mark appreciation under US pressure did not solve the persistent US trade deficit since 1970s.The only country could manipulate exchange rate in history is US after the world war two until 1971, when US had huge trade surplus but did not float its currency to balance the world trade.
The real purpose of the US policy is to maintain its dollar power under tremendous pressure of depression and huge debt.Currently, US had tremendous difficult to expand fiscal stimulus by raising tax or issuing more debt. A currency appreciation in Asian countries would be a free lunch for US to shrink its national debt. However, Krugman and US politicians completely mis-judged the outcome of a trade war.
First, China is not the competitor of US export, but Japan and EU are main rivals of US export. China goods are basic consumer goods, not capital goods. A tariff to Chinese products is equivalent to a huge consumption tax hike to American consumers. It will dramatically increase US labor cost and damage US competitiveness in the world market. It will also increase US inflation, which would force Fed to increase interest rate. So that dollar will appreciate rather than depreciate.
Second, China is not Japan where politician would yield to American pressure by playing security card. In the past, China could stand US nuclear threat for two decades even before developing its own nuclear weapon. Who could imagine any Chinese leader would bow to American pressure. An all-out trade war will certainly fail Krugman's battle plan, since he has no idea about the changing world balance. After Asian financial crisis, Korea, and Southeast Asian countries suddenly realized that China is a more reliable trade partner than US. For Japan, Australia, and other countries, China already replaced US as the largest export market for them. Recently, German was out of recession largely because of large increase in its export to China. If US could not accept China as an equal partner in dealing international crisis, the outcome would be the end of dollar power and US-centered international financial order. The alternative is the emergence of regionalism. China led East Asian and Pacific market will out grow American and EU market in the 21th century. I bet the west coast of the US will increasingly integrate into the greater China market and the east coast hawks like Paul Krugman and his alliance in the US Congress would lost their followers in the historical current. It is fun to see a self-claimed liberal and Keynesian economist to launch a trade war and lost during the Greater Depression caused not by trade imbalance but by American monopoly power in finance.
Ping Chen, Peking University and Fudan University in China
link:http://www.economist.com/user/Ping%2BChen%2Bat%2BPKU/comments