China's Yuan/Dollar Peg: Untenable, Unsustainable, Indefensible, Unsound

There few things these days on which both Main Street and Capitol Hill agree, but one of them is undoubtedly the idea that a flood of artificially cheap Chinese imports is killing the American economy and propelling China to the top of the global food chain, and that our elected officials must "get tough" on the Great Red Menace.

It seems the S&P 500's recent strength is somehow comforted by the fact that the USD is riding high on its cleanest dirty shirt meme at 34 month highs but unfortunately for the Chinese (and their practical peg to the USD), things are a little less fun than in the old mercantilist manipulation days.

Canada’s dollar declined to a two- week low versus its U.S. counterpart as concern increased that the world’s 11th-largest economy is slowing. The currency weakened versus the majority of its most-traded peers after data on Feb. 8 showed employment unexpectedly fell, the nation had its ninth straight monthly trade deficit and housing starts sank to the lowest since 2009. The loonie also fell as commodities and global stocks sank amid ebbing risk appetite.

China's trade surplus with the United States shrinks by a quarter when calculated according to which countries provide the parts and services that go into its exports and imports.

...through the Lens of Multiple Regression I hesitate to add to the welter of commentary on President Hu Jintao's state visit (e.g., [0], but Professor Mark Wu's recent NYT Op-Ed China's Currency Is Not Our Problem inspired me to think again about how econometrics can inform policy. Bivariate vs.

By Cees Bruggemans, Chief Economist of FNB.Although mid-2010 was a bit slow (3Q2010 showed as little as 2.6% growth), this was mostly due to strike action in manufacturing and the public sector (between them contributing nearly a third of economic activity).

The following guest post was contributed by Ian Lamont, an MIT Sloan Fellow. He was previously the managing editor of the Industry Standard, and has also researched China’s state-run media and communications policies.