The domestic economy is currently going through a cyclical adjustment, Barclays Capital economist Marcelo Salomon told Forbes last week.

FORBES: Brazil Still Hiring More Than Firing

The strongest argument for a revaluation now is not that the yuan is undervalued, but that an adjustment would halt speculative capital inflows and so mop up the excess liquidity.

ECONOMIST: China's economy

Yet if the capital suddenly flees, these countries face a painful downward adjustment of domestic wages and prices.

ECONOMIST: Exchange rates

The view that adjustment will come through share prices rather than capital accumulation turns Mr Tobin on his head, so it is unsurprising, if rather awkward for the authors, that the great man by no means endorses his disciples.

ECONOMIST: Letter of credit | The

The adjustment we're talking about is to subtract maintenance-level capital expenditures, such as for boilers, plumbing and roofs.

FORBES: Shaky Dividends

The current-account deficit, now around 5% of GDP, is a key factor: if capital flows into America slowed even more sharply, or dried up, the adjustment involved in reducing the current-account deficit could be painful both for America and the rest of the world.

ECONOMIST: Time for a rethink | The

More broadly, in the United States, for example, the dollar made artificially expensive by capital inflows related in part to its reserve currency status has prevented the exchange rate adjustment needed to balance our trade in goods and services.

FORBES: The Euro's Dutch Disease