What should be done about Asia’s undervalued currencies?

[CAMBRIDGE] Major Asian currencies’ exchange rates are again at the centre of debates in international monetary economics.

With China, Japan and South Korea all running trade and current-account surpluses, and the US running corresponding deficits, some argue that the renminbi, yen and won are undervalued.

However, given the fundamentals underlying these imbalances, foreign-exchange intervention is unlikely to do much good.