Quantitative Easing, Intervention, and Currency Wars, Again (Thinking about what is driving -- and will drive -- the yen) by Menzie Chinn

While I understand that shifts in exchange rates complicate policy makers’ lives (particularly in the euro area [2]), to some extent I think that competitive depreciations can lead to a desirable outcome insofar as it leads to a modest global (or at least G-7 wide) acceleration of inflation.[3] [4][5] 

Where the real conflict will come is in the G-20 forum. [6] There it is not so clear at all that China and the rest of the emerging market economies need higher inflation. Rather, they need to continue to allow their currencies to appreciate in order to prevent overheating. We shall see if they follow this path -- hope springs eternal.

In "Currency War or International Policy Coordination", Barry Eichengreen succinctly summarizes the current situation as compared against that of the 1930's:

...when the U.S., the Eurozone, the United Kingdom and Japan once again all experienced broadly similar deflationary pressures, quantitative easing bringing about some currency depreciation was again an appropriate symmetrical response. More focus on first-best monetary measures would again have been better, and international coordination of monetary easing might again have reduced uncertainty, although how much difference this would have made is, once more, an open question.  

The difference in the recent episode is the presence of a second group of economies that were not affected symmetrically. Emerging markets were worried about inflation rather than deflation and about currencies, asset prices and, in some cases, growth rates that were too strong rather than too weak. Their first-best response was fiscal tightening. International coordination of monetary easing in the advanced countries with fiscal tightening in emerging markets would have been better, although once again how much better is a matter for debate. More concentration on first-best fiscal measures appropriate for countering over-strong demand, overheated growth, overvalued currencies and inflation and less recourse to second-best interventions like trade and capital controls, this time too, would have been better still. But once again binding political constraints prevented full recourse to first best measures. And once again they made effective international coordination impossible to achieve.

What QE means for the world: Positive-sum currency wars by Greg Ip

Phoney currency wars: The world should welcome the monetary assertiveness of Japan and America (Economist)