As the debate over China’s exchange-rate policy and the US response intensifies, this column argues that a large Chinese revaluation – whether forced of voluntary – will not be a free lunch for the US. Drawing on a theoretical cost-benefit analysis, it suggests that if the US wants to create jobs at the lowest costs, it should first consider further fiscal expansion.
Alan Auerbach, Maurice Obstfeld, 23 October 2010
Yiping Huang, 20 October 2010
On 19 October, the Chinese central bank announced a series of rate hikes. This column argues that the moves were aimed at combating domestic inflation and addressing the risks of an asset bubble.
Yiping Huang, 19 October 2010
The ongoing global imbalances has strengthened calls for the US to declare trade war with China. This column argues that the US did not emerge victorious from the last currency war with Japan, and against China the chances are even slimmer. Instead the upcoming G20 meeting should focus on a broad range of structural adjustments from both sides.
Gérard Roland, 09 October 2010
How should China respond to the threat of tariffs from the US? This column provides a solution that could result in the desired appreciation of the renminbi and at the same time allow China to take the lead on climate change.
Willem Thorbecke, 06 October 2010
The US-China currency dispute remains heated. This column argues that if a real appreciation in the Chinese currency is not achieved through exchange rate adjustment, it will happen through inflation in China and deflation in the US. It says a better Chinese policy mix would involve nominal appreciation of the renminbi combined with absorption-increasing policies such as developing human infrastructure.
Joshua Aizenman, Rajeswari Sengupta, 05 October 2010
Are China and Germany both responsible for the global imbalances? Using four decades of current-account data, this column argues that the role of the US should not be overlooked. A rise in the US’ current-account deficit is matched one for one with a rise in China and Germany’s surpluses. But this relationship – and the global imbalances with it – may well be coming to an end.
Daniel Gros, 08 October 2010
With the US threatening to label China a “currency manipulator”, this column presents a plan to address global imbalances without risking a trade war. It proposes a “reciprocity” requirement – if the US can’t buy Chinese government bonds, then China can’t buy US bonds either.
Yiping Huang, 29 September 2010
How should policymakers deal with global imbalances? This column argues that a return to the Plaza Accord of the 1980s with an exclusive focus on the exchange rate could well dilute the G20’s other agendas and may not even work in practice. The best solution is instead to focus on structural reforms.
Jesus Felipe, Utsav Kumar, Arnelyn Abdon, 26 August 2010
Why have China and India been able to grow so quickly? This column argues that while the industrial policies pursued by both countries up until the 1980s led to gross mistakes and inefficiencies, China and India would not be where they are now without them. Their export baskets are far more sophisticated and diversified than expected given their income per capita.
Luis Servén, Ha Nguyen, 29 July 2010
Global imbalances have taken centre stage in the debate on the global economic outlook. This column surveys the debate over the roots of global imbalances and argues that asymmetries in the supply and demand for assets, rather than goods, are responsible. With this interpretation, global imbalances are unlikely to go away any time soon.
Joseph Gyourko, Yongheng Deng, Jing Wu, 28 July 2010
Reinhart and Rogoff’s recent influential study of financial crises finds a recurring root – the country’s property markets. This column argues that a similar housing bubble may be developing in China. Urgent research is needed to determine the risk of a full blown crisis.
Harry Wu, 28 July 2010
In this column in memory of Angus Maddison, Harry Wu pays tribute to a mentor, friend, and pioneer who mapped economic performance across the world, and nurtured a passion for Japan and China.
John Whalley, Xueyi Zheng , Yaguang Zhang, 20 July 2010
While many commentators focus on China’s future, this column draws economic theory insights from its past. It argues that Chinese monetary theory preceded Western thought and influenced the likes of Adam Smith and Karl Marx. Moreover, it says the Eastern emphasis on the pursuit of wisdom, as opposed to knowledge, has a role to play in today’s economic debate.
Lucian Cernat, Kay Parplies, 16 July 2010
While China is recognised as one of the world's leading destinations for inward foreign direct investment, outward investment by Chinese companies has also taken off in recent years. This column presents survey data suggesting that, similar to western firms, Chinese companies tend to invest in well-developed countries with a large market size and a favourable institutional environment.
Mona Haddad , Cosimo Pancaro, 08 July 2010
Current discussions over the value of China’s currency demonstrate the controversy that exchange-rate policy is capable of igniting. This column suggests that while a managed real undervaluation can enhance domestic competitiveness, it is difficult to sustain in the post-crisis environment – both economically and politically. It says that a real undervaluation works only for low-income countries, and only in the medium term.
Willem Thorbecke, 06 July 2010
Will China’s decision to ditch the dollar peg help rebalance the global economy? This column argues that China’s action may facilitate a concerted appreciation in Factory Asia, helping the region redirect production away from western markets and towards domestic consumers.
Robert Lawrence, Gary Hufbauer, 06 July 2010
Originally scheduled to end in 2005, Doha negotiations have dragged into their ninth year. This column argues that, while many observers assign blame to the complexity of 153 members reaching a consensus, the heart of the matter is far simpler. It says that if the US and China come up with new offers, the momentum for a speedy agreement will be unstoppable.
Simon Evenett, 11 June 2010
Simon Evenett of the University of St Gallen talks to Viv Davies about his recent Vox e-book on the US-Sino currency dispute, which brings together the latest research on the behaviour of the renminbi, the role it has played in global imbalances and the potential responses of China and its trading partners to the dispute over balances and exchange rate policies. Evenett discusses the key policy messages for the US and China - and the implications for the EU. The interview was recorded in June 2010.
Richard Zeckhauser, Karen Eggleston, John Rizzo, Hai Fang, 05 June 2010
Understanding the relationship between female employment and fertility is a vital ingredient for effective population policy. This column presents new findings from China based on well over 2000 women between 20 and 52 years old. It finds that non-agricultural jobs for women reduce the number of children per woman by 0.64 and the probability of having more than one child by 54.8%.
Pranab Bardhan, 28 May 2010
Pranab Bardhan of the University of California, Berkeley, talks to Romesh Vaitilingam about his new book ‘Awakening Giants, Feet of Clay: Assessing the Economic Rise of China and India’. He argues that significant poverty reduction in both countries is mainly due to domestic factors – not global integration, as most would believe. The interview was recorded at the London School of Economics in May 2010.