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The Political Economy of Exchange Rates: The Case of the Japanese Yen


  • Nathalie Aminian
  • KC Fung
  • Alicia Garcia-Herrero
  • Chelsea C Lin


This paper sets out a political economy model of strategic exchange rates, focusing in the importance of external lobbying. Applying it for the recent history of the Japanese yen, we show that pressure from the U.S. trade negotiators contributed to an appreciation of the Japanese yen, as well as to a reduction in import prices and profits of Japanese commercial banks.

Suggested Citation

  • Nathalie Aminian & KC Fung & Alicia Garcia-Herrero & Chelsea C Lin, 2007. "The Political Economy of Exchange Rates: The Case of the Japanese Yen," Working Papers 0702, BBVA Bank, Economic Research Department.
  • Handle: RePEc:bbv:wpaper:0702

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    References listed on IDEAS

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    Cited by:

    1. K.C. Fung & Alicia Garcia-Herrero & Francis Ng, 2013. "International Price Dispersion and Market Segmentation in Japan and the United States : Theory and Empirics," Microeconomics Working Papers 23410, East Asian Bureau of Economic Research.

    More about this item


    political economy model; lobbying; Japan; yen;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other


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