Many economists and policymakers believe that China keeps its currency artificially cheap to help its export industries. But there is much less agreement on how the policy affects the United States. If China's currency policy has hurt U.S. exporters, it has also benefited our consumers. Moreover, with a more expensive Chinese currency, would we simply import from other low-cost producers instead? And is China's currency, in fact, still substantially undervalued? The cover story in the latest issue of Econ Focus (formerly Region Focus) looks at these and other questions about currency manipulation.
Also in this issue:
• Green jobs. Various federal, state, and local policies are based on the idea that the United States can make meaningful progress on both the environment and unemployment with tax preferences and public investments in favor of “green jobs.” But there are trade-offs between the best policies for environmental goals and the best ones for short-term job creation.
• Caring for the mentally ill. An estimated one-fifth of the U.S. population has a mental illness, but the mentally ill make up more than half of jail and prison inmates and one-third of the homeless. Treatments for mental illness have made major strides in the past 50 years – how are federal, state, and private programs connecting the mentally ill, or not connecting them, with the help they may need? And what can economics tell us about how to deal with this issue?
• Interview with John Haltiwanger, professor of economics at the University of Maryland and formerly chief economist with the Census Bureau, on job creation and destruction, changes in recruiting intensity since the Great Recession, and the role of small businesses in countering unemployment.
Econ Focus is the economics magazine of the Federal Reserve Bank of Richmond. It covers economic issues affecting the Fifth Federal Reserve District (the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia) and the nation.
For a free subscription to Econ Focus or for copies of the magazine, contact the Bank's Research Publications division at (800) 322-0565 or subscribe online. The articles are available online at http://www.richmondfed.org/publications/.
The Richmond Fed serves the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia and most of West Virginia. As part of the nation's central bank, we're one of 12 regional Reserve Banks that work together with the Federal Reserve's Board of Governors to strengthen the economy and our communities. We manage the nation's money supply to keep inflation low and help the economy grow. We also supervise and regulate financial institutions to help safeguard our nation's financial system and protect the integrity and efficiency of our payments system.