Policy Insights

Policy Insight 70: The euro in the 'currency war'

• Guillaume Plantin Pierre-Olivier Gourinchas Philippe Martin Agnès Bénassy-Quéré
6 Feb 2014

All currencies cannot be weak at the same time ? if one currency weakens, at least one other must strengthen. From this unpleasant arithmetic emerges the concept of 'currency wars', a mutual and vain race to the monetary bottom. The reality, however, is somewhat more complex.