Currency War 2009-2011 Social Sciences Research Paper (Research Paper Sample)

Background
China has been a part of a currency war with the US from 2009-2011. China’s exchange rate policy had been the topic of a significant debate between analysts and the International Monetary Fund (IMF).
Effect of the Currency War
I choose this currency because it had a great impact on the decisions that the US made regarding its exchange rate policy. Furthermore, other countries with emerging market economics like Asia and Latin America had to suffer significantly because of this compulsive devaluation (Murphy and Yuan, 2009). Compulsive devaluation means that different countries lower the value of their currencies to promote their domestic currency. This artificial devaluation results in an increased amount of exports and the imports decrease drastically. The time frame that I will cover in this assignment is three years, which is from 2009-2011. Being a major superpower in the world, China benefited significantly from the devaluation of its currency. The country’s economy thrives on the export of goods. Since China devalued its currency, the Asian market giants had to lower the cost of their exports to gain a competitive market advantage (Bhalla and Qiu, 2004). A lower currency value made the cost of imports higher, which ultimately resulted in people buying country made products that boosted the domestic industry.