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.
Pranab Bardhan, Friday, May 28, 2010 - 00:00
Ambrogio Cesa-Bianchi, Hashem Pesaran, Alessandro Rebucci, Cesar E. Tamayo, TengTeng Xu, Thursday, May 20, 2010 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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 - 00:00
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.
Simon J Evenett, Friday, April 16, 2010 - 00:00
Today Vox posts a new eBook “The US-Sino currency dispute: New insights from economics, politics, and law” that gathers 28 short essays written by 33 authors from around the world. The eBook provides the best available economic, legal, political, and geopolitical thinking on the confrontation, as well as on the causes and likely consequences of the dispute.
Takatoshi Ito, Thursday, April 15, 2010 - 00:00
One objection to the calls for China to let its currency appreciate argues that the yen's appreciation during the 1980s was a cause of Japan’s “lost decade”. This column instead blames policymakers for not dealing with Japan’s property bubble early enough. China should learn from these mistakes with its own property bubble and let the renminbi appreciate.
Joel P. Trachtman, Friday, April 30, 2010 - 00:00
Does the US have a legal case against China’s exchange-rate regime? This column, which first appeared in Vox's latest eBook, argues that any claim against China at the WTO would face substantial hurdles, and would be unlikely to add pressure on China any time soon. If a claim does go ahead, it is more likely than not to fail.
Jeffrey Frankel, Friday, April 16, 2010 - 00:00
Much of the debate over China’s exchange-rate policy has focused on the effect on the US and other western economies. This column provides a comprehensive summary of China’s exchange-rate policy over the last five years and argues that it would also be in China’s interest to let its currency appreciate – and now is as good a time as any.
Claude Barfield, Friday, April 16, 2010 - 00:00
As the speculation over US action on China’s alleged currency manipulation intensifies, this column outlines the bills, proposals and comments that make up the political background to this debate.
Yiping Huang, Friday, April 16, 2010 - 00:00
The debate over the cause of China’s current-account surplus continues to develop. This column suggests a number of factors are probably to blame and one less-considered cause is input-cost distortion caused by China’s asymmetric economic liberalisation. Any debate on policy response must therefore move beyond simply discussing currency appreciation.
Fred Bergsten, Friday, April 16, 2010 - 00:00
C Fred Bergsten is one of several commentators calling for action against China’s exchange-rate policy. In this column, he outlines a three-part multilateral action plan to force China to allow the renminbi to appreciate: label China a “currency manipulator”, seek a special IMF consultation, and request a WTO dispute settlement panel.
Dukgeun Ahn, Friday, April 16, 2010 - 00:00
How might the US take action through the WTO over China’s alleged currency manipulation? This column analyses three potential legal issues: legality of exchange-rate policy under the GATT rules, legality under the subsidy rules, and the feasibility of non-violation complaints. It concludes that any WTO resolution will be difficult to achieve because the organisation is not designed to deal with alleged exchange-rate manipulation.
Charles Wyplosz, Friday, April 30, 2010 - 00:00
The current debate in the US over Chinese exchange-rate policy can be viewed as a rerun of the 1970s and ‘80s, with China taking Japan’s role. This column, which first appeared in the Vox's latest eBook, argues that while there is a relationship between current-account deficits and surpluses, causality is difficult to establish. Politics aside, even if China does not choose to appreciate its currency, inflation will eventually finish the job.