...which accounts for little unless we compare the inflation rates.

The really interesting thing about exchange rates is in the long term not the official exchange rate, but its movement in comparison to purchasing power parity (PPP).


One example about PPP; Krugman recently published some stats about Japan which made Japanese workers look rather unproductive in comparison to U.S. workers. This can be wholly explained with the undervaluation of the Yen; the same statistic expressed with PPP would have looked very differently.
This PPP thing contributes to an outdated and false sense of superiority of Americans in regard to their economic standing.

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Somewhat related to the topic in general:
A short story and defence-related concern about the Euro crisis.