When two currencies are locked together . . .?

Question

I'd be grateful if somebody out there could direct me to some articles or an online discussion about the kinds of things that happen when two currencies are locked together, like Hong Kong's and the U.S. dollar are.

This situation is surely common enough, except not one of the economics textbooks at my disposal says a word about it.

What in particular I seek to understand is what sorts of things will happen if the smaller country prints too much or too little of its own currency, and whether and how inflation rates between the two countries will be identical.

Thanks, anybody who can help.

Answer 1

The correct term is "pegged", so if you've been looking for "locked", no wonder you had a hard time finding anything.
Wikipedia has a decent article about it:

http://en.wikipedia.org/wiki/Fixed_exchange_rate

Answer 2

A much better example is the US Dollar and the P.R. of China Renminbi. I think you can find plenty of discussion as to why the US wants China to revalue their currency - The renminbi is somewhat undervalued, which makes Chinese inports cheaper for US consumers.
Another example is the US Dollar and Argentine peso in 2001. I know that Wikipedia has a nice article on precisely that subject:

http://en.wikipedia.org/wiki/Argentine_economic_crisis_%281999-2002%29

Answer 3

When my coins get stuck together, I soak them in hot water for half an hour.