Discuss the view on a major theme of Ferguson & Schularick (2011) is that the Chinese currency needs to be substantially revalued (to appreciate against the dollar).

Global Financial Markets

Part 1: The term “Chimerica” has been coined to describe a world economy that has been dominated, for at least the last a couple of decades, by Chinese export-led development combined with U.S. over-consumption. The financial crisis marks the beginning of the end for the “Chimerica relationship”. Discuss this view.

You should read the following papers:

Ferguson, N. & Schularick, M. (2011). The End of “Chimerica”, International Finance 14 (1) 1-26.
Piatkowski, M. (2011).The Inexorable Rise of “Chimerica”, International Finance 14 (1) 1-26.

Part 2: A major theme of Ferguson & Schularick (2011) is that the Chinese currency needs to be substantially revalued (to appreciate against the dollar). Can you reconcile this view with the views expressed in the DBS paper cited below?

It is recommended you read the following article:

DBS Research Group: China: The Rise and Rise (and Rise) of the RMB

Discuss the view on a major theme of Ferguson & Schularick (2011) is that the Chinese currency needs to be substantially revalued (to appreciate against the dollar).