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  • March 2013
  • Case
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Currency Wars

By: Laura Alfaro and Hilary White
  • Format:Print
  • | Language:English
  • | Pages:8
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Abstract

In February 2013, the G-20 finance ministers met in Moscow, Russia to discuss the rising anxieties over a potential international currency war. It was speculated that certain countries were purposely devaluing their currencies in order to improve their competitiveness in global markets. Emerging markets contended that the expansionary monetary policies of the major central banks, such as the US Federal Reserve, European Central Bank, and the Bank of England, were causing significant and detrimental spillover effects, such as currency appreciation, declining exports, and rising inflation, in less developed economies. Conversely, the major central banks insisted that such policies were necessary for reviving economic growth both domestically and internationally. Would these policies successfully create a resurgence of growth? Can expansionary monetary policies be considered "beggar-thy-neighbor" actions by emerging markets? How should developing nations respond?

Keywords

Currency; Competitiveness; Trade Policy; Devaluation; Exchange Rate; Monetary Policy; Quantitative Easing; Inflation Targeting; Capital Flows; Central Banking; Currency Exchange Rate; Competitive Strategy; Emerging Markets; Policy; Trade; Conflict and Resolution; Banking Industry; Public Administration Industry; Moscow

Citation

Alfaro, Laura, and Hilary White. "Currency Wars." Harvard Business School Case 713-074, March 2013.
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About The Author

Laura Alfaro

General Management
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Related Work

    • June 2013 (Revised June 2013)
    • Faculty Research

    Brazil's Enigma: Sustaining Long-Term Growth & Currency Wars

    By: Laura Alfaro and Hilary White
Related Work
  • Brazil's Enigma: Sustaining Long-Term Growth & Currency Wars By: Laura Alfaro and Hilary White
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