Currency wars, what drives the wild fluctuations in exchange rates?
Currency wars or competitive devaluation has change dramatically throughout history. The meaning of currency wars is completely different in comparison with that before the change of currency rates system. Firstly, in my thesis, there will be a brief history of currency wars and a reference of quantitative easing in US, Europe and Japan. Then the factors which determine the currency exchange rates and the reasons for the wild fluctuation in currency rates during a currency war will be mentioned. Moreover, the possible means for a currency war will be discussed. Lastly, there will be answered questions such as why is this happening, why a country devaluates its currency, which fundamental of a country affect this fluctuation and what the difference between the impact of currency war in developed countries and in emerging countries after the crisis of 2008.