[Group 2] Exported-Imported Inflation

8/13/2019 [Group 2] Exported-Imported Inflation

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MACROECONOMICS

MIDTERM GROUP ASSIGNMENT

TOPIC: Exported and Imported Inflation: How the US

exports its inflation to the rest of the world

Instructor:

Mr. Hoang Xuan Binh, PhD

Group 2:

L Quang Anh

Mnh Duy

Nguyn Hng Qun

Nguyn Trng TonTrn Hong nh

Nguyn L c


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OUTLINE:

I. An overview of the World Financial Crisis ......................... 3II. What is exported and imported Inflation?.......................... 4

1. A general view of inflation ............................................................... 42. Definition of exported and imported inflation ................................. 5

III. Exported and imported inflation How it works .............. 61. How the US exported its inflation .................................................... 62. How other countries imported inflation ........................................... 7

IV. Why can America export its inflation? ................................ 8V. How China is dealing with imported inflation .................... 10

1. The currency war between the US and China .................................. 102. China, gold and the next world reserve currency ............................. 12

VI. Questions ................................................................................. 14VII. Reference ................................................................................ 15


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Exported and Imported Inflation: How the US exports

its inflation to the rest of the world

I. An overview of the World Financial CrisisIn December 2007, the United States entered a new period of

recession due to the results of the bursting of housing bubble in mid-2007.

According to reports of the Department of Labor, roughly 8.7 million jobs

were shed from February 2008 - February 2010, and GDP contracted by

5.1%, making the Great Recession the worst since the Great Depression

dated back in 1929.

The National Bureau of Economic Research (NBER) dated June 2009

as the final month of the recession; however, the recovery since 2009 has

been weak and both GDP and job growth remain erratic and uneven. It also

pointed out unemployment as of August 2013 was 7.3%, with about 6.8

million jobs created since February 2010. American household wealth has

plunged to levels not seen since 1992, with incomes dropping to 1996 levels

when adjusted for inflation. Nearly 50 million Americans (16%) are in

poverty, up from 12.1% in 2007.

But the Great Recession not only affected the USs economy but alsospread out globally. The global recession was first seen in Europe, as in July

1, 2008 Denmark fell into recession. Starting from then, the crisis quickly

spread out to other countries in Europe. Since late 2009, Eurozone has had to

deal with the Euro crisis (a combinedsovereign debt crisis, abanking crisis

and a growth and competitiveness crisis) and the economy condition of its

members are not too bright. The crisis also took its toll on the system of

governments of Europe countries. On February 6, 2012 Romanias

government was the sixth government that was disbanded after Greece,

Italy, Portugal, Ireland and Spain.

Along with Europe, other continent also affected by the global crisis

but in a much lighter scale. China, the worlds second largest economy was

no exception. The recession along with the Chinese property bubble, which
http://en.wikipedia.org/wiki/Sovereign_debthttp://en.wikipedia.org/wiki/Banking_crisishttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Competitivenesshttp://en.wikipedia.org/wiki/Competitivenesshttp://en.wikipedia.org/wiki/Economic_growthhttp://en.wikipedia.org/wiki/Banking_crisishttp://en.wikipedia.org/wiki/Sovereign_debt


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had already existed in China from 2005, are the main causes lead to Chinas

declining economic growth in 2012. As stated in latest reports, so far at least

670,000 small and medium-size companies have been closed; leaving

mainly the large-size enterprises (which may or may not contain companies

which have outsourced their workplaces away from the United States -

leaving at least five million people there unemployed.1

The reason our group chose this subject was to answer the question

why the Great Recession originally started in the States spread out to the

whole world. We believe that one of the primary causes is because America,

with its dollars being the worlds primary reserve money, exported inflation

to other countries. But how and by what means did the US can do that and

how did the world import inflation? This research we conducted will helpyou have a clearer look behind the machinery of the worlds financial

systems and find the answer.

II. What is exported and imported Inflation?1. A general view of Inflation:

Inflation is an increase in the average level of prices of goods and

services. Inflation rate which is smaller than 10% is considered moderate

inflation. It can has good impact on the economy by spuring the

production of companies and enterprises because price increases leading

to more profit. Inflation rate which is more than 10% is considered

galloping inflation or hyperinflation, these type of inflation can destroy

the whole economy.

In fact, there is no exact percentage where inflation turns from

moderate inflation to Hyperinflation. So you cant say for sure that

9.9% inflation is normal but 10% inflation is hyperinflation. Typically inhyperinflation thinks just gets progressively worse and worse. Every

month, days, or even by the hours, the inflation rate just gets higher and

higher until the inflation curve goes hyperbolic like this figure:

1All the data for world financial crisis taken fromwikipedia.org
http://en.wikipedia.org/wiki/Outsourcing#United_Stateshttp://en.wikipedia.org/wiki/Great_recessionhttp://en.wikipedia.org/wiki/Great_recessionhttp://en.wikipedia.org/wiki/Great_recessionhttp://en.wikipedia.org/wiki/Great_recessionhttp://en.wikipedia.org/wiki/Outsourcing#United_States


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There are 3 main kinds of inflation: demand-pull inflation, cost-pushinflation and structural (demand-shift) inflation. In this group research,

we will talk about another kind of inflation that arose significantly

important to many economys recently, it is imported-exported inflation.

2. Definition of exported and imported inflation:Imported inflation is: Inflation due to an increase in the price of

imports. As the price of imports increase, prices of domestic goods using

imports as raw materials also increase, causing an increase in the general

prices of all goods and services. Imported inflation may be caused by

foreign price increases or depreciation of a country's exchange rate.2

About exported inflation, it doesnt have a precise definition. You can

basically refer it to the condition when a developed country, with strong

economy that have deep influence on others, and their currency is widely

used and reserved by others, can make the prices of goods and services in

other countries rise through its own currency manipulation.

2Definition taken frominvestorwords.coma website that provide business and investing glossary.
http://www.investorwords.com/15442/imported_inflation.htmlhttp://www.investorwords.com/15442/imported_inflation.htmlhttp://www.investorwords.com/15442/imported_inflation.htmlhttp://www.investorwords.com/15442/imported_inflation.html


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III. Exported and imported inflation How it works1. How the US exported its inflation:

In 2007, the Financial Crisis started in the US, derived from the

Subprime lending by bankings system, especially investment banks.

Subprime lending means making loans to people who have difficulty

paying back the debt, who dont qualified the lending standard, especially

in real estate. So, from 2004 to 2006, everyone bought houses and make

the housing price go up and up, creating the housing bubble until it

reached the peak and collapsed in 2007. The price of real estate plunge

down, drop uncontrollable. At the end o f 2008, the price of some houses

in america was only 2 dollars. Couldnt recovering capital, banks went

bankruptcy. Insurance companies who joined capital with banks tobenefit form housing market, died as well, following by money market

and stock market. This is called Financial Crisis. To drive the America

out of crisis, with no other choices, the goverment had to pump out

money by actually printing more of them, so the money supply rise lead

to dollar depreciation and inflation.

First, we will dig a little into how international trade works.

Commonly, when a country has a trade deficit with others, its currencywill depreciate as there is a greater supply of its currency flows to foreign

markets. The result is that foreign imports are becoming relatively more

expensive (in term of its currency) and its exports relatively cheaper to

foreigners. Consiquently, foreigners will then import more its goods and

services, increasing the demand of its currency, which will invert the

outflow of its currency. This will continue until the equilibrium is

reached.

For the U.S, on account of the special status of its dollar being the

worlds primary reserve currency, this conventional agreement is not

really appliable. Since every countries accumulate the U.S dollars as a

form of savings, the demand for U.S dollars is much more than just an


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implicit demand for its exported goods and services. Therefore, the saved

U.S dollars that foreign countries hold have to be saved somewhere by

recycling them back to the U.S, usually via the purchase of U.S Treasury

Bonds.

The U.S, being in the desirable position of having its money as the

worlds premier reserve currency, is not subjected to the same rules as

the other countries. It can spend more than it earns simply by printing its

own dollars to pay foreigners.

Through this convention, the U.S can silently steal wealth and

resources from foreign countries by buying their goods and services with

its own printed money. Since the exported flood of U.S dollars has to

return home through the foreign purchases of its Treasury Bonds, they

are out of circulation, they do not remain within the U.S economy to

cause domestic price inflation.

2. How others countries imported inflation:What about the case of other countries? In the context of FED

pumping an enormous amount of money into the economy, the price ofall primary commodities (oil, gold, mental) will go up since there is a

massive demand for input for firms production when the supply is nearly

unchanged. Facing this situation, countries has two options:

1. Float the domestic currency, resulting in the rise in the localcurrency.

2.

Print more and force the local currency to fall alongside the dollar.

If the government implements the first option and leave the market

forces to balance themselves, the flood of U.S dollars will bid up the

price of domestic currency, causing a sharp appreciation. However, an

appreciation of the domestic currency is highly unfavorable to those


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export-dependent countries, say, China, India, Russia, etc because that

will weaken their exports competitiveness in the USmarket.

With those countries choosing freely floating exchange rate, they still

could not get away with importing inflation. Since the prices of primarygoods, especially oil and metal, go up as a result of high demand for

production, the cost of imported inputs and demand for US dollar to trade

also increases and makes the firm sell their output for higher price, which

means inflation.

Another choice is printing more domestic money to purchase all the

inflow of dollars in order to maintain the former exchange rate would

result in high inflation. When the value of currency decreases, prices go

up. Inflation of currency results in price inflation.

In reality, developed countries like Germany, Japan or Canada can let

the dollar fall, and allow their domestic currencies rise because these

countries is already developed and rich. The rest majority of the world

developing countries like China or India, which are heavily reliant on

export, cant allow a hit on their growth, because that will follow by

severe social and political consequences.

IV. Why can America export its inflation?Why can America exports its inflation to other countries? To get to

the main point, we first define what is Foreign Exchange Reserves: Foreign

Exchange Reserves are foreign money held by International banks for use in

international trade and in an effort to diversify their holdings and hedge

against the inflation of their own currency3. The most common thingsbought and sold by foreign exchange reserves are oil and gold. Up to the

time of 1944, the asset of choice was gold and it was used as the medium of

exchange between countries. But in July 1944, 44 Allied nations gathered in

3Definition taken frominflationdata.com
http://inflationdata.com/articles/2012/12/28/foreign-exchange-reserves/http://inflationdata.com/articles/2012/12/28/foreign-exchange-reserves/http://inflationdata.com/articles/2012/12/28/foreign-exchange-reserves/http://inflationdata.com/articles/2012/12/28/foreign-exchange-reserves/


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Bretton Woods, New Hampshire., and made the U.S. dollar the reserve

currency of the world. At that time, the dollar was pegged at $35 per ounce

of gold and therefore rather than exchanging gold, countries were able to

exchange dollars, which at the time was considered as good as gold.4

But thanks to its currencys reserve status that the U.S was able to

pretend that the dollar was still worth $35 per ounce while quietly printing

more and inflating its currency. Eventually, France called the United States

bluff to demand gold at $35 per ounce of gold and in 1971, Nixon was

forced to admit that the dollar was no longer worth $35 per ounce and the

last link between the dollar and gold was closed.

But Nixon had another trick to maintain the power of Dollar. In 1973,

he negotiated a deal with Saudi Arabia requiring that all oil sales bedenominated in U.S. dollars, therefore regain the status of U.S Dollar as the

world reserve currency because everyone needed oil and so they needed

dollars as well.

Being used as a foreign exchange reserve currency sharply increases

the value and usefulness of that currency. When the Dollar is the reserve

currency, U.Ss economic power and influence is automatically spread

globally. Like any other commodities, the value of U.S dollar is based on

supply and demand. By artificially creating an high demand for its currency,

the FED was able to create more dollars without sparking

significant inflation at home. Every time the Federal Reserve prints a new

dollar, the rest of the dollars in the world get devalued whether they are in

the United States or China. As a result, the US was able to export its

inflation to other countries because after those dollars was printed and spent,

they went abroad and never returned home so they had no effect on domestic

inflation. Over the years, the United States has abused its role as issuer of

the worlds reserve currency,silently stealing wealth from the world through

currency creation.

4From articleThe Bretton Woods Monetery and Financial Conference history.state.gov
http://history.state.gov/milestones/1937-1945/BrettonWoodshttp://history.state.gov/milestones/1937-1945/BrettonWoodshttp://history.state.gov/milestones/1937-1945/BrettonWoodshttp://history.state.gov/milestones/1937-1945/BrettonWoodshttp://history.state.gov/milestones/1937-1945/BrettonWoodshttp://history.state.gov/milestones/1937-1945/BrettonWoods


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V. How China is dealing with imported inflationIn this part, we will dig deeper in one typical country that import

inflation from Americathe case of China. China 2ndlargest economy in

the world, also suffer the most severely from imported inflation as the

largest foreign creditor of US. How are they dealing with it?

*the chart taken frominflationdata.com

1. The currency war between the US and China:For many years, the currency war between U.S and China has been

one of the hottest issue that affect the global economy. Currency war,

also known as competitive devaluation, is a condition in international

affairs where countries compete against each other to achieve a relatively

low exchange rate for their own currency. As the price to buy a particular

currency falls so too does the real price of exports from the country.Imports become more expensive. So domestic industry, and thus

employment, receives a boost in demand from both domestic and foreign

markets.5When a country is suffering from economic downturn, high

5Definition taken fromWikipedia.org
http://inflationdata.com/articles/2012/03/12/china-boosting-gold-price/http://inflationdata.com/articles/2012/03/12/china-boosting-gold-price/http://inflationdata.com/articles/2012/03/12/china-boosting-gold-price/http://en.wikipedia.org/wiki/Currency_warhttp://en.wikipedia.org/wiki/Currency_warhttp://en.wikipedia.org/wiki/Currency_warhttp://en.wikipedia.org/wiki/Currency_warhttp://inflationdata.com/articles/2012/03/12/china-boosting-gold-price/


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unemployment rate or wishes to follow a policy of export led growth, a

lower exchange rate can be considered advantageous. Devaluation is a

potential solution for developing nations that are consistently spending

more on imports than they earn on exports. A lower value for domestic

currency will raise the import prices while making exports cheaper. This

tends to encourage more domestic production, which raises employment

and GDP. The U.S. is allowing its dollar to devalue by expansionary

fiscal and monetary policy. It's doing this through increasing goverment

spending, thereby increasing the debt, and by maintaining the FED funds

rate at nearly zero together with applying Quantitative Easing, increasing

credit and the money supply. China is keeping its currency low by

pegging the yuan to the dollar, along with other currencies. It keeps thepeg by buying U.S Treasuries, which limits the supply of dollars, by that

strengthening it. This method keeps the yuan low compared with U.S

Dollar.

So, Chinese goverment prefer to peg the yuan to the dollar as it used

to. China continue its currency devaluation and export-lead strategy

despite inflationary thread and U.S pressure toward yuans appreciation.

Why would China chosed to follow this option? Firstly, according to oneIMF reports: Fixed investment related to tradable goods plus net exports

together accounted for over 60% of Chinas GDP growth from 2001 to

2008 (up from 40% from 1990 to 2000), which was significantly higher

than in the G-7 countries (16%), the euro area (30%) and the rest of Asia

(35%).6 Therefore, for a developing country heavily reliant on

exporting, yuans develuation is the vital key to the stability and growth

of Chinas economy overall. Secondly, the action of creating an excess of

currency spikes up inflation and creates social unrest. Since China

manages a state-controlled economy, they control inflation through other

means such as fuel-price subsidies and price controls on essential

commodities. Thirdly, China has also recently inked agreements with

6Excerpt from articleChinas response to US pressure to revalue the RMB chinacenter.net
http://www.chinacenter.net/chinas-response-to-u-s-pressure-to-revalue-the-rmb/http://www.chinacenter.net/chinas-response-to-u-s-pressure-to-revalue-the-rmb/http://www.chinacenter.net/chinas-response-to-u-s-pressure-to-revalue-the-rmb/http://www.chinacenter.net/chinas-response-to-u-s-pressure-to-revalue-the-rmb/http://www.chinacenter.net/chinas-response-to-u-s-pressure-to-revalue-the-rmb/http://www.chinacenter.net/chinas-response-to-u-s-pressure-to-revalue-the-rmb/


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Iran to bypass the U.S. Dollar and trade Gold for Oil, thus reduce the

impact of imported inflation. Last but not least, the political pressure

from importing nations can be serious. For instance, in the late 1980s

Japan was forced by the US to stop adopting a similar tactic. However,

China is strong enough to withstand the pressure.

2. China, Gold and the next World Reserve Currency:By controlling fiat currencies in the world, central banks are distorting

possession and commodity worth. Only investors knowing well what

things cost and their true value might be able to achieve success in

investing; by using gold to evaluate prices, the worlds oldest and most

stable form of medium, one can gain access to that knowledge. Depending on how bad a crisis gets, gold ranges from being between the

best answer and the only answer said a famous economist. China

understood that in the end fiat currency would become worthless and

gold would always valuable so the country silently start stocking.

Therefore, golds price began to go sky-high. In 2011, India, had been

known as the worlds biggest buyer of gold, had to pass its title to China.

According to history, India had always been the worlds leading goldbuyer; its people traditionally save and display their wealth in gold,

prefer to hang it around their neck instead of trusting banks. China is also

known as the largest producer of gold with an amount bigger than

Australia or South Africa or Canada, etc. In reality, China produces more

than 300 tons of gold a year, which equals to 50% more gold than

Australia, the worlds second biggest producer.7But they dont export it!

Gold can come into China but not one ounce of gold is allowed to leave

the country.

So, where is all that gold going??? Here is the answer: China wants

the yuan to be backed with a huge percentage of gold, thereby making the

7Data retrieved frommining.com
http://www.mining.com/world-gold-production-2012-preliminary-results-71758/?gce_var=lower-comments&utm_expid=17625373-0.wR1isPasQ6GSvnWKGYTdqA.1&utm_referrer=http%3A%2F%2Fwww.google.com.vn%2Fimgres%3Fclient%3Dfirefox-a%26hs%3D6xO%26rls%3Dorg.mozilla%3Aen-US%3Aofficial%26channel%3Dfflb%26biw%3D1280%26bih%3D684%26tbm%3Disch%26tbnid%3DEYLHGzH5ck6ULM%3A%26imgrefurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fworld-gold-production-2012-preliminary-results-71758%2F%26docid%3Di2ve6UxJbFl0kM%26imgurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fwp-content%2Fuploads%2F2013%2F02%2FWorld_gold_production_2011-2012.jpg%26w%3D656%26h%3D635%26ei%3Df2s8UrvbGO7gigLlx4GoDg%26zoom%3D1%26ved%3D1t%3A3588%2Cr%3A3%2Cs%3A0%2Ci%3A84%26iact%3Drc%26page%3D1%26tbnh%3D206%26tbnw%3D213%26start%3D0%26ndFixed%20investment%20related%20to%20tradable%20goods%20plus%20net%20exports%20together%20accounted%20for%20over%2060%25%20of%20China%E2%80%99s%20GDP%20growth%20from%202001%20to%202008%20%28up%20from%2040%25%20from%201990%20to%202000%29p%3D14%26tx%3D156%26ty%3D72http://www.mining.com/world-gold-production-2012-preliminary-results-71758/?gce_var=lower-comments&utm_expid=17625373-0.wR1isPasQ6GSvnWKGYTdqA.1&utm_referrer=http%3A%2F%2Fwww.google.com.vn%2Fimgres%3Fclient%3Dfirefox-a%26hs%3D6xO%26rls%3Dorg.mozilla%3Aen-US%3Aofficial%26channel%3Dfflb%26biw%3D1280%26bih%3D684%26tbm%3Disch%26tbnid%3DEYLHGzH5ck6ULM%3A%26imgrefurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fworld-gold-production-2012-preliminary-results-71758%2F%26docid%3Di2ve6UxJbFl0kM%26imgurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fwp-content%2Fuploads%2F2013%2F02%2FWorld_gold_production_2011-2012.jpg%26w%3D656%26h%3D635%26ei%3Df2s8UrvbGO7gigLlx4GoDg%26zoom%3D1%26ved%3D1t%3A3588%2Cr%3A3%2Cs%3A0%2Ci%3A84%26iact%3Drc%26page%3D1%26tbnh%3D206%26tbnw%3D213%26start%3D0%26ndFixed%20investment%20related%20to%20tradable%20goods%20plus%20net%20exports%20together%20accounted%20for%20over%2060%25%20of%20China%E2%80%99s%20GDP%20growth%20from%202001%20to%202008%20%28up%20from%2040%25%20from%201990%20to%202000%29p%3D14%26tx%3D156%26ty%3D72http://www.mining.com/world-gold-production-2012-preliminary-results-71758/?gce_var=lower-comments&utm_expid=17625373-0.wR1isPasQ6GSvnWKGYTdqA.1&utm_referrer=http%3A%2F%2Fwww.google.com.vn%2Fimgres%3Fclient%3Dfirefox-a%26hs%3D6xO%26rls%3Dorg.mozilla%3Aen-US%3Aofficial%26channel%3Dfflb%26biw%3D1280%26bih%3D684%26tbm%3Disch%26tbnid%3DEYLHGzH5ck6ULM%3A%26imgrefurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fworld-gold-production-2012-preliminary-results-71758%2F%26docid%3Di2ve6UxJbFl0kM%26imgurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fwp-content%2Fuploads%2F2013%2F02%2FWorld_gold_production_2011-2012.jpg%26w%3D656%26h%3D635%26ei%3Df2s8UrvbGO7gigLlx4GoDg%26zoom%3D1%26ved%3D1t%3A3588%2Cr%3A3%2Cs%3A0%2Ci%3A84%26iact%3Drc%26page%3D1%26tbnh%3D206%26tbnw%3D213%26start%3D0%26ndFixed%20investment%20related%20to%20tradable%20goods%20plus%20net%20exports%20together%20accounted%20for%20over%2060%25%20of%20China%E2%80%99s%20GDP%20growth%20from%202001%20to%202008%20%28up%20from%2040%25%20from%201990%20to%202000%29p%3D14%26tx%3D156%26ty%3D72http://www.mining.com/world-gold-production-2012-preliminary-results-71758/?gce_var=lower-comments&utm_expid=17625373-0.wR1isPasQ6GSvnWKGYTdqA.1&utm_referrer=http%3A%2F%2Fwww.google.com.vn%2Fimgres%3Fclient%3Dfirefox-a%26hs%3D6xO%26rls%3Dorg.mozilla%3Aen-US%3Aofficial%26channel%3Dfflb%26biw%3D1280%26bih%3D684%26tbm%3Disch%26tbnid%3DEYLHGzH5ck6ULM%3A%26imgrefurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fworld-gold-production-2012-preliminary-results-71758%2F%26docid%3Di2ve6UxJbFl0kM%26imgurl%3Dhttp%3A%2F%2Fwww.mining.com%2Fwp-content%2Fuploads%2F2013%2F02%2FWorld_gold_production_2011-2012.jpg%26w%3D656%26h%3D635%26ei%3Df2s8UrvbGO7gigLlx4GoDg%26zoom%3D1%26ved%3D1t%3A3588%2Cr%3A3%2Cs%3A0%2Ci%3A84%26iact%3Drc%26page%3D1%26tbnh%3D206%26tbnw%3D213%26start%3D0%26ndFixed%20investment%20related%20to%20tradable%20goods%20plus%20net%20exports%20together%20accounted%20for%20over%2060%25%20of%20China%E2%80%99s%20GDP%20growth%20from%202001%20to%202008%20%28up%20from%2040%25%20from%201990%20to%202000%29p%3D14%26tx%3D156%26ty%3D72


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yuan the worlds most trusted currency. By hoarding vast amounts of

gold, the nation may soon be able to back its currency, the yuan, with

gold, thus skyrocketing the value of that currency. If Chinas yuan were

to become more valuable than the U.S. dollar it would automatically

become the primarily sought form of reserve currency. The Chinese

government actually encourage its citizens to buy gold, they are

preparing their citizens for a major shift in the world economythe shift

that lift China to be the strongest economy in the world.


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VI. Questions:1.

What is the reason for you to chose this topic?

2. What are the negative effects of inflation on economy and social?3. Are there any good sides of inflation?4. As the world reserve currency, does it mean the more you accumulate it

the better? If not, why?

5. What is the current state of Vietnams economy since the globalrecession?

6. What did Vietnamese goverment do to face imported inflation?7. Can you talk more about currency war? What is advantages for a country

to devalue its currency?

8. Why do you chose China as a study case for a country that importedinflation?

9. Aside from purchasing goods and services, is there any other way for USdollars to return home?

10.Where is the place that received severest damage due to the crisis? Why?11.How many countries have gone bankrupt since the Great Recession

spread out globally?

12.Is there any country which avoided recession? If yes, how?13.Are we out of the global recession yet?


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VII. Reference: Macroeconomics I powerpoint slides by Mr. Hoang Xuan Binh Online sources:

Inflationdata.com Bloomberg.com Ft.com (Financial Times) Worldbank.org Imf.org Investopedia.com English.people.com.cn Chinadaily.com.cn Wikipedia.org

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[Group 2] Exported-Imported Inflation