In a message dated 98-01-17 18:56:50 EST, you write: << What's happening with relative productivity growth in the SE Asian countries? Shaikh says that fundamental currency values are determined by relative productivity changes, and he's got a convincing set of charts to prove it. >> I believe Anwar's analysis covers a +20-year period. I don't think you can ever "prove" any of this stuff with graphs, 3SLS, chaos-theory or anything else. Empirical methods and techniques when thoughtfully constructed and applied - Doug's book is one of the best examples of this - is the equivalent of what lawyers term "best evidence." I find graphical presentations often summarize the punch lines of the most complex econometric analysis. By the way, John Sarich (who is writing a dissertation under Anwar's direction) also has come up with some very interesting econometric results on the productivity-exchange rate nexus. John has got manufacturing data (by two-digit SIC code) for the OECD and Europe; moreover, John computed labor time per unit of output for each industry and is doing a three-way analysis of the relationships: by industry (across countries), by country (across industries), and then cointegrating the two. You'll have to read his dissertation to get the details. Finally, I think that short-term currency fluctuations are determined by either a "Soros Effect" (speculator driven) or a "China Choir" effect (we're the loudest on the block, and if we de-value, we're taking everybody down). The Marx-effect (longer term fundamentals a la Shaikh arguments) probably have less predictive power in the short run, but probably indicate where you short/long a currency 1-3 years out (i.e. its a good model for the futures pit bulls!) Jason How about this scenario: China calls for SE Asian "debtors conference" and demands new terms (kinda like Lee I. asking the gov't for a handout). "Too big to fail - on a global scale?" Now let's see those 30-year T-bonds rally!!! Jason