The capitalist enclaves would reach so deeply into the country's pool of labour that the remaining supply of farmers, traders, dockworkers and bag-carriers would fall short of demand.

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Wages and domestic demand would rise and the current-account surplus would fall.

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Hitting the energy-efficiency targets would reduce demand for those permits, in which case their price might fall too low to encourage further investment into low-carbon technologies.

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There would, on the other hand, be a useful fall in interest rates, because investors would no longer demand a premium for the risk that the exchange-rate peg would be broken.

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Any such move would likely see interest rates rise and demand for bonds, particularly Treasuries, fall.

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Now, given that the severe recession of 2008-2009 was caused by a sudden fall in demand, and given that demand and NGDP are the same thing, it would make sense for the Fed to increase NGDP in order to accelerate the economic recovery.

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