The Pacific Rim's complex trade dynamics present a persistent puzzle in international finance. This study investigates the seemingly symbiotic, yet imbalanced, trading relationship between the United States and Asia, particularly China, despite significant trade deficits. It seeks to explain why the dollar remains strong amidst growing account disparities and challenges the assumed correlation between economic openness and low inflation in the region. Furthermore, the book analyzes the liberalization of Asian capital accounts and identifies a critical disconnect in understanding exchange rate volatility.

This study is recognized for its in-depth examination of the perplexing financial issues within the Pacific Rim. It offers a timely analysis of the trade imbalances between the United States and Asian economies, providing explanations for the sustained strength of the dollar. The book also critically assesses the relationship between economic openness and inflation, and highlights discrepancies in the understanding of exchange rate volatility. Its findings are expected to have significant implications for international economic policy.