Exchange Rates by Alan V. Deardorff University of Michigan 2018 PubPol/Econ 541 Exchange Rates by Alan V. Deardorff University of Michigan 2018

Announcement I will be leaving town after class and will miss my office hour this afternoon. Lecture 1: Overview

Nominal Value of US Dollar Trade-Weighted Index, Daily 2018 10% Dollar Index Broad.xlsx https://www.federalreserve.gov/releases/h10/summary/indexb_b.htm Source: Federal Reserve Lecture 2: Tensions

$/€ 9% Jan 1, 1018 Source: X-rates.com Lecture 2: Tensions

$/¥ 9% Jan 1, 1018 Source: X-rates.com Lecture 2: Tensions

Lecture 2: Tensions Economist 9/7/18 https://www.economist.com/finance-and-economics/2018/09/08/why-argentine-orthodoxy-has-worked-no-better-than-turkish-iconoclasm Lecture 2: Tensions

29% https://www.ft.com/content/b064dcd8-b0db-11e8-99ca-68cf89602132 Lecture 2: Tensions

$0.000,025,0= 67% $0.000,008,3= Lecture 2: Tensions https://www.wsj.com/articles/iran-struggles-to-rein-in-illicit-trade-in-dollars-1535448602?tesla=y 67% $0.000,008,3= Lecture 2: Tensions

https://www.wsj.com/articles/swedish-krona-a-painful-trade-that-markets-missed-1535631401?tesla=y Lecture 2: Tensions

China’s Exchange Rate, US$/Yuan, 2000-2018 37% China currency.xlsx From IMF, IFS Econ 340, Deardorff, Lecture 14: Pegging

China’s Exchange Rate, US$/Yuan, 2000-2018 The exchange rate did not change at all between 2000 and 2005 China currency.xlsx From IMF, IFS Econ 340, Deardorff, Lecture 14: Pegging

And reserves more than quadrupled! See China Currency.xlsx Econ 340, Deardorff, Lecture 14: Pegging

China’s Exchange Rate, US$/Yuan, 2000-2018 The yuan appreciated steadily between 2005 and 2008 China currency.xlsx From IMF, IFS Econ 340, Deardorff, Lecture 14: Pegging

Reserves continued to rise, to almost $2 trillion See China Currency.xlsx Econ 340, Deardorff, Lecture 14: Pegging

China’s Exchange Rate, US$/Yuan, 2000-2018 China currency.xlsx From IMF, IFS The yuan stopped rising in 2008, then rose slowly Econ 340, Deardorff, Lecture 14: Pegging

Reserves mostly rose after 2008, to over $4 trillion in 2014 See China Currency.xlsx Reserves mostly rose after 2008, to over $4 trillion in 2014 Econ 340, Deardorff, Lecture 14: Pegging

China’s Exchange Rate, US$/Yuan, 2000-2018 China currency.xlsx From IMF, IFS The yuan reached its peak in 2013, and began to fall in 2015 Econ 340, Deardorff, Lecture 14: Pegging

From 2014-16, China’s reserves were falling See China Currency.xlsx From 2014-16, China’s reserves were falling Econ 340, Deardorff, Lecture 14: Pegging

China’s Exchange Rate, US$/Yuan, 2000-2018 China currency.xlsx From IMF, IFS Most recently, the yuan has moved up in 2017, down in 2018 Econ 340, Deardorff, Lecture 14: Pegging

While reserves have moved little See China Currency.xlsx While reserves have moved little Econ 340, Deardorff, Lecture 14: Pegging