A Critique of Monetary Protectionism
Despite the political appeal of exchange-market manipulations, monetary protectionism is unsupported by economic arguments. Manipulation of nominal exchange rates has no permanent effect on the terms of trade and risks inflation.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.