Since the 2008 credit crisis we have seen central bankers all around the world reduce their policy rates and generally keep them low (remember the Federal Reserve has our fed funds rate presently at almost zero). We have also seen "quantitative easing" where the central bank buys government bonds to push down long-term rates. These low rates haven't generated the growth hoped for because businesses have been reluctant to borrow and banks have been tighter on their lending standards.
Also, there has been much fiscal stimulus in form of government spending, but such fiscal policy has its limits given the already high U.S. budget deficit. Congress doesn't have much appetite for additional stimulus spending as voters are sending a message with every primary that they expect responsible decision making in Washington.
Now we are seeing currency considerations getting more attention. The general idea is that every country wants its currency to go down to help growth by making exports cheaper to foreign customers with the stronger paper. The U.S. continues to pressure China to allow its Yuan to strengthen. Japan recently intervened with significant dollar purchases to try to slow yen appreciation versus the dollar.
It all gets very confusing, but one thing is clear. If everyone tries to cheapen their currency relative to other countries then no one wins such a race to the bottom.
