The Instigator
bblr922
Pro (for)
Losing
0 Points
The Contender
lannan13
Con (against)
Winning
5 Points

Should Japan peg the yen at 225 per dollar?

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Post Voting Period
The voting period for this debate has ended.
after 1 vote the winner is...
lannan13
Voting Style: Open Point System: 7 Point
Started: 9/12/2015 Category: Economics
Updated: 2 years ago Status: Post Voting Period
Viewed: 468 times Debate No: 79648
Debate Rounds (3)
Comments (1)
Votes (1)

 

bblr922

Pro

Four years ago, the yen was at its all-time postwar high at roughly 76 to the dollar. Today, the yen is worth 120 to the dollar. But having the yen at 120 to the dollar doesn't always raise inflation to the 2% target set by the Bank of Japan. In order to raise inflation to 2% (the Bank of Japan's inflation target), the yen needs to weaken further . The Japanese government could do this by pegging the yen at 225 to the dollar. In the long term, having a yen pegged at 225 to the dollar would increase exports and inflation, boosting the Japanese economy. It would also discourage people from using the yen as a safe haven, forcing them to invest in the dollar or Treasury bonds.
lannan13

Con

I accept.

I now await my opponent's opening arguments.
Debate Round No. 1
bblr922

Pro

Four years ago, the yen was at its all-time postwar high at roughly 76 to the dollar. Today, the yen is worth 120 to the dollar. But having the yen at 120 to the dollar doesn't always raise inflation to the 2% target set by the Bank of Japan. In order to raise inflation to 2% (the Bank of Japan's inflation target), the yen needs to weaken further . The Japanese government could do this by pegging the yen at 225 to the dollar. In the long term, having a yen pegged at 225 to the dollar would increase exports and inflation, boosting the Japanese economy. It would also discourage people from using the yen as a safe haven, forcing them to invest in the dollar or Treasury bonds.
lannan13

Con

My opponent is looking to cause another Peso crisis with the plan he is purposing.

We can look at Mexico's Peso Crisis and we can see that the same will happen. Mexico's issue was that they had a severely undervalued Paso and it was pegged at a certain price to the dollar. Meaning that at any time the average citizen could go to their Central bank and trade X Pesos to dollars, however, the Peso was hit hard and more and more people wanted to trade Pesos for the dollar. Eventually they ran out of dollars and their Treasury collapse. The same would occur in Japan. Not only do they devalue their currency by 3 times just to get there, we can see that there is no way the markets can survive the devauling of their currency and they will be sent back to the "Lost Generation" of stalled economic growth. The WSJ has reported that the Yen is already weak and fragil[1], so this would crash the Japenese economy.


1. (http://www.wsj.com...)
Debate Round No. 2
bblr922

Pro

Look at last month's yuan devaluation. In order to stop Chinese stocks from falling and revive the Chinese economy, the People's Bank of China devalued the yuan on August 11. However, devaluation didn't work and immediately shocked global markets.
lannan13

Con

The same thing can happen to the Yen. Not to mention all the side effects of what I have argued.

All points extended. Please vote Con!
Debate Round No. 3
1 comment has been posted on this debate.
Posted by bobsndyer1 2 years ago
bobsndyer1
I'd like to peg some jap girls.
1 votes has been placed for this debate.
Vote Placed by tajshar2k 2 years ago
tajshar2k
bblr922lannan13Tied
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Total points awarded:05 
Reasons for voting decision: Con is able to show that the pegging the Yen will result in a crisis which will devalue their currency even more. Pro's argument is making various assumptions " dollar doesn't always raise inflation to the 2% target set by the Bank of Japan. " But Con shows that this crisis could also happen with the Yen. Con also used sources.