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In the US this would cause inflation and a rise in interest rates which would start a recession that would affect the world's economy. A 2nd consequence would be that it would create a weak USD maybe causing Asian currencies change to peg to another currency (GBP? Euro?)
(iii) How can this problem be resolved with the lowest cost? What policy actions (in USA, Europe and China) would you recommend?
The main messages are: "the longer the delay the bigger the adjustment" and "the agreement has to be as global as possible" (include the US, Asia and Europe)
Several measures are suggested (all taken together and agreed between the countries):
1...
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In the US this would cause inflation and a rise in interest rates which would start a recession that would affect the world's economy. A 2nd consequence would be that it would create a weak USD maybe causing Asian currencies change to peg to another currency (GBP? Euro?)
(iii) How can this problem be resolved with the lowest cost? What policy actions (in USA, Europe and China) would you recommend?
The main messages are: "the longer the delay the bigger the adjustment" and "the agreement has to be as global as possible" (include the US, Asia and Europe)
Several measures are suggested (all taken together and agreed between the countries):
1...
Essay fragment
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