Sir, Martin Wolf is absolutely correct to argue that targeting current account imbalances is far more effective in rebalancing trade than targeting currencies (“Current account targets are a way back to the future”, November 3). After all, simply forcing a revaluation, for example, of the renminbi will have no effect on the trade imbalance if Beijing responds by reducing real interest rates or expanding socialised credit, both of which it did after the renminbi began revaluing in 2005, and which Tokyo did after the Plaza Accords. In both cases the expansion of cheap credit more than reversed the impact of an appreciating currency, and the trade surplus actually grew, rather than shrank.
亲爱的编辑，
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