TRADE IMBALANCES AND CURRENCY MANIPULATION

Abstract

The global economy has become increasingly interconnected, with countries engaging in extensive trade relationships that can sometimes lead to imbalances. Trade imbalances occur when a country's imports exceed its exports, resulting in deficits that can have significant economic implications. One contributing factor to trade imbalances is currency manipulation, where countries intentionally devalue their currency to make their exports more competitive on the international market. This practice can distort trade flows and exacerbate existing imbalances, while also potentially leading to retaliatory measures from trading partners. Understanding the complexities of trade imbalances and currency manipulation is crucial for policymakers, as these issues can impact economic stability and growth at both the national and global levels. By delving into the intricacies of these phenomena, it is possible to develop strategies to address and mitigate their effects on the global economy.