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.
Joseph Gyourko, Yongheng Deng , Jing Wu, Wednesday, July 28, 2010
Harry X Wu, Wednesday, July 28, 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, Zheng Xueyi, Yaguang Zhang, Tuesday, July 20, 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, Friday, July 16, 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, Thursday, July 8, 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, Tuesday, July 6, 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 Z. Lawrence, Gary Clyde Hufbauer, Tuesday, July 6, 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 J Evenett, Friday, June 11, 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, Saturday, June 5, 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, Friday, May 28, 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.
Ambrogio Cesa-Bianchi, Hashem Pesaran, Alessandro Rebucci, Cesar E. Tamayo, TengTeng Xu, Thursday, May 20, 2010
What would a Chinese currency revaluation mean for Latin America? This column argues that a revaluation is no silver bullet. It will not solve Latin America’s problems with excessive capital inflows, exchange-rate appreciation, and loss of competitiveness. In fact it poses serious risks. A 10% revaluation of the renminbi could reduce growth in Latin America by 0.3%.
Kati Suominen, Friday, April 16, 2010
Should the US take action over China’s exchange-rate policy? This column argues “yes”. But while China would be momentarily hurt by the imposition of tariffs, US companies, workers, and consumers would suffer in the long run. The US should instead follow Fred Bergsten’s three-stage plan of engaging the IMF and WTO. The column also suggests that a long-run solution should be worked out within the G20.
Alicia García-Herrero, Tuuli Koivu, Friday, April 16, 2010
If China’s currency does appreciate, what impact will it have? This column argues that while Chinese exports will fall, so will Chinese imports, because China imports components from other East Asian countries that are then processed before being exported to western markets. A 10% rise in the renminbi would reduce imports of components by 6%.
Joseph Francois, Friday, April 16, 2010
Will an appreciation of the Chinese currency create more US jobs? This column argues quite the opposite. A 10% appreciation would lead to a rise in the US price level by approximately 0.16%, meaning that in total the US would experience a mix of falling real wages and falling employment.
Andrew Small, Friday, April 16, 2010
The approaching US decision over China’s exchange-rate policy is as much about politics as economics. This column argues that the coming months will define broader Sino-US relations. The good news is that Beijing stepped back this month, avoiding an outright confrontation. The bad news is that this is only round one.
François Godement, Friday, April 16, 2010
The delayed announcement of a US decision over China’s exchange-rate policy has stoked the fire of debate over trade relations. This column argues that the efforts of China’s main trade partners – the EU as well as the US – would be better spent on ensuring a steady rebalancing of China’s economy towards greater private consumption and imports rather than simply currency revaluation.
Joseph E. Gagnon, Friday, April 30, 2010
This column argues that a 10% revaluation of the Chinese currency would likely increase US employment by at least 670,000. This is in stark contrast to recent Vox contributions by Simon Evenett and Joseph Francois claiming that an appreciation of the Chinese currency would reduce US employment by 400,000 to 600,000 jobs.
Arvind Subramanian, Friday, April 16, 2010
As the debate over China’s exchange rate intensifies, several commentators have been left despairing over the wide disparity in estimates of the extent of China’s currency undervaluation. This column argues that a new purchasing-power-parity approach provides a more consistent estimate of renminbi undervaluation at around 30%.
John R. Magnus, Timothy C. Brightbill, Friday, April 16, 2010
Does the US have a legal case for action against China’s exchange-rate policy? This column argues China’s currency regime qualifies as a subsidy in the legal sense and that the US has a legitimate case to respond within both the US and WTO legal frameworks. The high-profile difficulties are no reason to shy away from taking legal action.
Philip Levy, Friday, April 16, 2010
Many US analysts argue that China’s currency is undervalued and that its policy significantly impedes global macroeconomic rebalancing. This column outlines the possible policy responses available to the US. While multilateral policies are slower, they are less likely than unilateral policies to trigger a negative political response. But first the US needs to establish a principled basis for action.