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.
Raphael Auer, Andreas Fischer, 05 December 2010
Venkatachalam Shunmugam, Debojyoti Dey, 03 December 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, 27 November 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, 24 November 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, 11 November 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, 10 November 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, 04 November 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, 01 November 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, 01 November 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, 24 October 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, 23 October 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, 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.