With growing inflation in China, policymakers are facing tough decisions. This column argues that if the government is to curb inflation without allowing for the deflation of the tradables, it should do so though sector focused policies. Monetary policy is already committed to the objective of preventing deflation of the tradables and to dampen the credit cycle that is behind asset bubbles.
Domingo Cavallo, Fernando Díaz, Thursday, February 17, 2011
Avinash Persaud, Wednesday, February 16, 2011
Criticism of China’s exchange-rate policy continues throughout the US. This column argues that the US is in fact the exchange rate manipulator, due to its ongoing quantitative easing. What the US needs to do for a sustainable turnaround is to learn from other successful economies like China and Germany – not de-rail them.
Nicholas Bloom, Mirko Draca, John Van Reenen, Thursday, February 3, 2011
Chinese exports are often blamed for job losses and firm closures in developed economies. This column tracks the performance of more than half a million manufacturing firms in 12 European countries over the past decade. It finds that competition with Chinese exports is directly responsible for around 15% of technical change and an annual benefit of almost €10 billion in these countries – the wider productivity effects may well be larger.
Jan Luiten van Zanden, Wednesday, January 26, 2011
China has been one of the world’s most dynamic economies in recent decades, but how did it fall so far behind? This column argues that the industrial revolution occurred in Europe rather than China because European entrepreneurs were eager to adopt machines to cut down on high labour costs. China didn’t “miss” the industrial revolution – it didn’t need it.
Marcos Chamon, Kai Liu, Eswar Prasad, Tuesday, January 18, 2011
In an effort to reduce its sizeable current-account surplus, the Chinese government has made it a priority to “rebalance” growth in China by stoking private consumption. This column examines the determinants of the high household saving rate that keeps Chinese consumption so low.
Uri Dadush, Vera Eidelman, Monday, December 20, 2010
Today’s currency tensions are the result of a complex set of forces arising from the Great Recession. This column presents lessons from the break-up of the gold standard and of the fixed-rate dollar standard. While competitive devaluations are less likely today than is commonly feared, there is no room for complacency.
Wolfgang Keller, Ben Li, Carol H Shiue, Sunday, December 19, 2010
The growing power of Chinese trade is almost daily news. This column argues that China’s role in world trade today is shaped in part by the post-1978 market reforms and in part by the Western invasion in the 19th century. Following the Opium Wars, China was forced to open its borders, providing the bedrock of technology and infrastructure that supported its future growth.
Uri Dadush, Shimelse Ali, Thursday, December 9, 2010
If China appreciates its currency, who will gain and who will lose out? This column argues that the single greatest beneficiary from a gradual renminbi revaluation, accompanied by measures to stimulate demand, will be China itself. Ironically, the US, which has been leading the charge on renminbi appreciation, would likely be among the losers. Certainly, a very large one-off revaluation that disrupts China’s growth hurts everyone.
Raphael Auer, Andreas Fischer, Sunday, December 5, 2010
Over the past two decades, Western European trade has become increasingly integrated with emerging economies. This column uses a novel empirical technique to show that import competition from East Asian low-wage countries – in particular China – has dampened inflation in five Western European nations. Increased integration with Turkey and Central and Eastern Europe, meanwhile, has had little effect on inflation.
Venkatachalam Shunmugam, Debojyoti Dey, Friday, December 3, 2010
Politicians, public servants, and commentators have been queuing up in recent months to raise their concerns about global imbalances, particularly the China-US imbalance. This column argues that while the two economies may present opposing public stances, they are quietly playing a tango that neither can step out of.
Yiping Huang, Saturday, November 27, 2010
China recently issued a set of new policy documents with the aim of stabilising prices in the country. This column asks whether these proposals are just dusted down manuscripts from the 1980s, disregarding thirty years of market-oriented reform. The term “monetary policy” is not even mentioned once.
Lorenzo Rotunno, Pierre-Louis Vézina, Wednesday, November 24, 2010
Smuggling is a pervasive phenomenon that often results in violence, distorted competition, and loss of tax revenue. This column argues that international migrant networks facilitate smuggling across borders, showing that the presence of Chinese-born migrants abroad increases tariff evasion in both China and host countries.
Chunding Li, John Whalley, Thursday, November 11, 2010
Over the last decade, China has been the target of more antidumping measures than any country in the world. This column examines the impacts and argues that China should be paying more attention to measures that come from its main trading partners.
Andreas Fuchs, Nils-Hendrik Klann, Wednesday, November 10, 2010
This year’s Nobel Peace Prize was awarded to Liu Xiaobo, the human rights activist who is currently a prisoner in China. Beijing has condemned the decision, saying it will harm relations with Norway. This column argues this threat should be taken seriously. It shows that receiving the Dalai Lama, who is perceived as a threat by the Chinese, can decrease exports to China by as much as 8.1%.
Richard Portes, Thursday, November 4, 2010
The threat of a currency war between the US and China is one of the main concerns for the G20 ahead of this month’s meeting in Seoul. This column say that while policymakers appear to grasp some of the issues, they underestimate the impact of quantitative easing by large economies on exchange rates worldwide.
Fred Bergsten, Monday, November 1, 2010
Yiping Huang recently argued that the US would not win a currency war over global imbalances. This column agrees that a currency or trade war would be lose-lose. But it says that such a conflict is inevitable unless the root causes of the growing imbalances are addressed
Helmut Reisen, Monday, November 1, 2010
The debate over global imbalances has a sharp focus on China. But this column says the debate is missing a crucial point: that China’s growth has been good for poor countries, so that a renminbi appreciation slowing Chinese growth will also hurt many other poor economies.
Andrew Mold, Sunday, October 24, 2010
Developing countries have enjoyed strong economic performance over the past decade – often growing twice as fast as OECD economies. This column asks whether developing countries will continue to outpace rich countries over the coming two decades. Updating Angus Maddison’s famous projections, it forecasts a world starkly different from today’s. The worlds’ poor countries will account for nearly 70% of global GDP in 2030.
Alan J Auerbach, Maurice Obstfeld, Saturday, October 23, 2010
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.
Yiping Huang, Wednesday, October 20, 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.