This is not healthy "system competition" between members of the currency union, but a "competitive devaluation" in all but name.
It is a term used to describe competitive devaluation of currencies, a scenario where various nations try to devalue their currencies in an attempt to gain an advantage over each other.
In the end competitive devaluation benefited no one, it is said, since all countries can't devalue their exchange rates against each another.
Competitive devaluation of currencies can be a race to the bottom, but tax competition benefits us, reminding us of what we could be.
Competitive devaluation is an inherently unstable system.
And if all this wasn't enough, now we have the dreaded spectre of competitive devaluation.
In any case, monetary easing achieved through a process of "competitive devaluation" was better than no monetary easing.
Beijing's intervention is a textbook example of the beggar-thy-neighbor competitive devaluation forbidden by the International Monetary Fund's charter.
But the region's leaders seem to realise that a round of competitive devaluation will help no one.
Would this blatant competitive devaluation reduce the hamburger standard to ashes?It certainly threatened to leave us in a pickle.
This comes after G20 finance ministers pledged to avoid a currency war, by declaring: We will refrain from competitive devaluation.
