Lots More With Brad Setser on the Yen, a New China Shock and Excavators

This podcast episode explores the weakness of the yen and its impact on Japan's economy, as well as the export boom in China and its repercussions globally. It delves into the factors driving yen weakness, such as monetary policy and interest rate differentials, and discusses the debate surrounding the need for higher inflation in Japan. The episode also highlights the significant increase in China's export volumes, particularly in sectors like electric vehicles and solar panels, due to falling export prices. The relationship between currency values and export volumes is examined, with examples of how the weak yen and yuan have influenced export competitiveness. Furthermore, the episode touches on the role of Chinese excavators in China's export boom and the concerns surrounding China's capacity to sustain its export growth. Finally, it explores the concept of financial interdependence and its implications on Sino-American relations, emphasizing the potential asymmetrical impact of actions between the US and China.