24 November 2010
http://krugman.blogs.nytimes.com/2010/11/24/devaluing-history/
"Name me a nation in history that has prospered by devaluing its currency."
...
How about:
-Britain, which recovered strongly from its early 90s doldrums after it
devalued the pound against the mark in 1992. (At the time, some wags
suggested putting a statue of George Soros in Trafalgar Square.)
- Sweden, which recovered from its early 90s banking crisis with an export
boom, driven by a devalued kronor.
- South Korea, which roared back from the 1997-1998 crisis with an export
boom, driven by a depreciated won.
- Argentina, which roared back from its 2002 crisis with an export boom,
driven by a depreciated peso.
And more. The truth is that every recovery from financial crisis I know of
since World War II was driven by currency depreciation. In fact, that's the
biggest reason for pessimism now: because of the global scope of this
crisis, the usual exit is blocked.
...
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