Beggar-thy-neighbours? Spillover effects of exchange rates

Aaditya Mattoo, Arvind Subramanian, Prachi Mishra, 23 March 2012

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Nearly all of the empirical research on exchange rates is focused on the impact of their changes on the country experiencing or undertaking them. This is true of the older, voluminous literature on the trade consequences of exchange rates (surveyed in Goldstein and Khan 1985), as well as more recent contributions like Rodrik (2008) and Berman et al. (2012).

Topics: Exchange rates
Tags: beggar-thy-neighbour, China, spillovers

China’s economic rebalancing is already underway

Yiping Huang, 17 February 2012

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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 (see, for example, O’Neill 2010 on this site).

Topics: Macroeconomic policy
Tags: China, consumption, rebalancing

The renminbi’s prospects as a global reserve currency

Eswar Prasad, Lei (Sandy) Ye, 16 February 2012

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Popular discussions about the prospects of China’s currency – the renminbi – range from the view that it is on the threshold of becoming the dominant global reserve currency to the concern that rapid capital-account opening poses serious risks for China.

Topics: International finance, International trade
Tags: China, exchange-rate policy, globalisation, renminbi

Does the renminbi matter? Evidence from China’s disaggregated processed exports

Willem Thorbecke, 29 January 2012

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China’s surging exports and its exchange rate have elicited consternation from economists, politicians, and pundits. How would a stronger renminbi affect China’s exports and its trade surplus? China’s entire surplus is in a customs regime called processing trade.

Topics: Exchange rates, International trade
Tags: China, exchange-rate policy, exports

Rogue aid? On the importance of political institutions and natural resources for China’s allocation of foreign aid

Axel Dreher, Andreas Fuchs, 27 January 2012

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In an obvious reference to China, US Secretary of State Hillary Clinton recently warned during her visit to Burma to “[b]e wary of donors who are more interested in extracting your resources than in building your capacity” (quoted in FT 2011).

Topics: Development, Politics and economics
Tags: China, development aid, natural resources, rogue aid

Are China and India converging?

Ejaz Ghani, 23 January 2012

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Both China and India have attracted global attention for rapid growth, but their growth patterns are very different (Rajan 2006, Pack 2008, Bosworth and Maertens 2010). China took the conventional route of manufacturing-led growth and is recognised as a global leader in manufactured exports.

Topics: Development, International trade
Tags: China, India, manufacturing, services

Global value chains are not all born identical: Policymakers beware

Carlo Altomonte, Filippo di Mauro, Gianmarco I.P. Ottaviano, Vincent Vicard, Armando Rungi, 4 January 2012

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Global value chains are increasingly important in international trade. The breakup of goods and services production between different companies often operating in different parts of the world (creating a ‘global’ value chain) can be seen all around us.

Topics: Global crisis, International trade
Tags: China, exchange-rate policy, global value chains, US

The contribution of Chinese FDI to Africa’s pre-crisis growth surge

John Whalley, Aaron Weisbrod, 21 December 2011

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In the three years before the 2008 financial crisis, GDP growth in sub-Saharan Africa (averaged over individual economies) was around 6%, 2 percentage points above the mean growth in the preceding ten years. This period also coincided with significant Chinese foreign direct investment (FDI) flows into these countries, accounting for as much as 10% of total inward FDI for some countries.

Topics: Development
Tags: Africa, China, FDI, growth

China’s dominance hypothesis and the emergence of a tripolar global currency system

Marcel Fratzscher, Arnaud Mehl, 15 December 2011

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The 2007–08 global financial crisis has brought the reform of the international monetary system back to the forefront of the international policy debate. Some G20 leaders, notably from emerging economies, are questioning the configuration of the current system based on a single currency, the US dollar, as global reference currency, and the euro, as a more regional currency.

Topics: International finance, Monetary policy
Tags: China, exchange-rate policy

The renminbi and poor-country growth

Helmut Reisen, 5 December 2011

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China’s current-account surplus over the past two decades can be explained in large part by its savings rate. Song et al (2010) have stressed the role of rising corporate savings due to reallocation within the manufacturing sector from low- to high-productivity companies. Wei (2010), meanwhile, explains China’s rising household savings with gender imbalances.

Topics: Development, International trade
Tags: China, exchange-rate policy, poor countries

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