Germany’s fiscal response to the crisis was timid compared with those of China and the US. This column uses business-cycle connectedness indices to show that Germany should follow in the footsteps of China and increase its domestic spending so that it will generate net positive connectedness to others. Germany was able to increase its exports thanks to the fact that countries like the US, China and Japan stimulated domestic spending significantly.
Kamil Yilmaz, Saturday, May 19, 2012
Carlo Carraro, Emanuele Massetti, Wednesday, April 25, 2012
In 2006 China became the world’s largest carbon dioxide polluter. This column argues that China is not rich enough to start reducing emissions immediately, but it is far too big not to do anything. The question is when and at what rate it is reasonable to call on China to start cutting back.
Marco Annunziata, Saturday, April 21, 2012
According to its latest projections, the IMF no longer sees China as the main source of imbalances in the global economy. This column argues that fears of a stalling Chinese economy are exaggerated, and that sustained and more balanced Chinese growth will actually be a rare nugget of good news for the global economy.
Julian di Giovanni, Andrei Levchenko, Jing Zhang, Monday, April 2, 2012
The late Nobel Laureate Paul Samuelson argued that if China’s productivity growth accelerates in areas where it does not currently have a comparative advantage – notably the service sector – developed countries may suffer. This column presents a multi-country, multi-sector model, and reaches the opposite conclusion: the world, including developed countries, is far better off when China’s growth favours its current comparative disadvantage sectors.
Aaditya Mattoo, Arvind Subramanian, Prachi Mishra, Friday, March 23, 2012
Do exchange rate movements in one country affect its competitors? This column suggests that a 10% appreciation of the renminbi increases other developing countries’ exports by about 2%. Where competition with China is especially intense, the increase could be as large as 6%. The results imply that an appreciation of the renminbi could provide a boost to developing country exports.
Yiping Huang, Friday, February 17, 2012
The international community, and particularly policymakers in the US, put great expectations on the contribution that China can make to a global economic recovery by rebalancing its economy through promoting consumption growth. This column, drawing on both official and unofficial data, argues that China’s long-awaited economic rebalancing is already well under way.
Eswar Prasad, Lei (Sandy) Ye, Thursday, February 16, 2012
Is China’s currency destined to become the dominant global reserve currency? This column argues that despite not yet having a flexible exchange rate or open capital account, China’s government is pursuing ‘liberalisation with Chinese characteristics’. It argues that the renminbi will become a reserve currency within the next decade, eroding but not displacing the dollar’s dominance.
Willem Thorbecke, Sunday, January 29, 2012
Understanding China’s economy is becoming as difficult as it is important. This is particularly the case for China’s exports and its exchange rate, which have been the source of controversy and intense debate in recent years. Shedding light on the issue, this column disaggregates China’s processing trade, with some surprising implications for policy in the region and elsewhere.
Axel Dreher, Andreas Fuchs, Friday, January 27, 2012
China is often accused of providing ‘rogue aid’. China is said to be more interested in securing natural resources, export markets, and political alliances than concerned about the development of needy countries This column looks at the data on China’s aid allocations between 1996 and 2005. It finds that China is in fact no more self-serving than most Western donors.
Ejaz Ghani, Monday, January 23, 2012
Mention China and India to economists and their first thought will be rapid growth. Their second thought might be how differently the two economies are achieving this: China through manufacturing, India through services. This column asks whether that stereotype may be changing.
Carlo Altomonte, Filippo di Mauro, Gianmarco I.P. Ottaviano, Vincent Vicard, Armando Rungi, Wednesday, January 4, 2012
Trade in today’s global economy is not a simple game of exchange-rate muddling. The complex web of global value chains ensures that products marked “Made in China” are often in fact made all over the world. This column looks at firm-level data from French firms between 2007 and 2009 and explores how their structure affects their behaviour, with insights for policymakers the world over.
John Whalley, Aaron Weisbrod, Wednesday, December 21, 2011
In the three years before the global crisis, the average GDP growth in sub-Saharan Africa was around 6%. This period also saw significant Chinese foreign direct investment flowing into the continent. This column uses growth-accounting methods to assess what portion of this growth can be attributed to Chinese FDI. Although for some countries and years the effects were negligible, some countries saw total GDP growth from 2002 to 2009 increase by 0.5 percentage points due to Chinese FDI alone.
Marcel Fratzscher, Arnaud Mehl, Thursday, December 15, 2011
Is the international monetary system tripolar – with the US dollar, the euro, and the Chinese renminbi at each corner? This column presents empirical evidence to suggest that the renminbi is already well on its way to being the dominant currency in Asia.
Helmut Reisen, Monday, December 5, 2011
China’s currency has appreciated substantially in recent years. While many in the west still argue that this is not sufficient and focus on the effects on their domestic industry, this column asks what the effects have been for the world’s poor countries.
Avraham Ebenstein, Moshe Hazan, Avi Simhon, Friday, December 2, 2011
For years, policymakers trying to influence the decisions of would-be parents have tried to change the ‘price’ of having children. In France they have made it cheaper; in China more expensive. This column looks at whether such policies are likely to have their desired effect. It examines unique evidence of a shock to the cost of having a child in Israeli communities between 1990 and 2000.
Valentina Bosetti, Jeffrey Frankel, Monday, November 28, 2011
The signatories of the UN Convention on Climate Change will meet again this week in Durban, South Africa. But time is running out if they are to come up with a successor to the Kyoto Protocol, especially with the US at loggerheads with China and India. This column proposes a novel yet pragmatic solution.
Bernard O’Connor, Sunday, November 27, 2011
Is China a market economy? This legal question matters as antidumping and anti-subsidies laws apply differently to market economies. This column deconstructs the myth that China will automatically get market-economy status at the WTO in 2016 and argues that if China wants the EU to recognise it as a market economy it should comply with the explicit criteria in EU law.
Heleen Mees, Philip Hans Franses, Sunday, November 20, 2011
Are the Chinese prone to money illusion? This column uses a unique Chinese dataset and finds that, unlike their American counterparts, Chinese people are more likely to base decisions on the real value and not be fooled by inflation.
Timothy Kehoe, Kim Ruhl, Saturday, November 19, 2011
In 1985, Mexico opened itself to trade and investment. In recent years, China has followed the same path with much more impressive results. But this column argues that the slow growth and crises that Mexico experienced after the initial boom should act as a warning to those optimistic about China.
Rajeswari Sengupta, Joshua Aizenman, Tuesday, November 15, 2011
Emerging markets face what some economists are calling a trilemma. They cannot simultaneously target exchange-rate stability, conduct an independent monetary policy, and have full financial integration. So what to do? This column looks at how Asia’s giants are responding – and in different ways.