Kevin Gowen wrote:
> Declan Murphy wrote:
> 
>> Kevin Gowen wrote:
>>
>>> If China is so concerned, why does it have the same central bank as 
>>> the US?
>>
>> China doesn't have the same central bank as the US. 
> 
> Sure it does. It's called the Federal Reserve. This is by dint of 
> pegging the yuan to the dollar

Still haven't actually got around to understanding Friedman et al yet 
have you. A currency peg to that of a major trading partner, or to a 
currency basket, does not create an endogenous Optimum Currency Area. 
Even with fixed exchange rates, money supply fluctuations and interest 
rate changes will vary. If what you claimed were true, then whenever the 
US central bank tightened MP China would follow suit regardless of 
Chinese M3, fiscal settings or aggregate demand.

-- 
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