currency exchange rates

The Value of the Yen, the Dollar, and Generational Issues by Dean Baker

Remarkably, while the value of the currency is apparently a hotly debated issue in Japan (at least according to the NYT), it is rarely mentioned in the United States. This could be due to the fact that more powerful interests than retired workers support an over-valued dollar in the United States.

The financial sector typically supports an over-valued currency since it reduces the risk of inflation and it makes them bigger actors overseas. Also, major retailers like Wal-Mart have established extensive supply networks overseas that rely on being able to buy goods cheaply. Most major manufacturers have also established subsidiaries in China and other countries with low wages.

These powerful interest groups would strongly resist any effort to lower the value of the dollar and thereby make U.S. goods more competitive in world markets. This could explain why the value of the currency is debated in Japan, while the NYT tells us that is only a matter of historical concern (the 1980s) in the United States.

Mitt Romney's Big Polish Idea: Let's Debase the Dollar! by Matt O'Brian

Pole's Apart by Krugman

Monetary Expansion Works: Poland Edition by Yglesias