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The United States and the PRC: Macroeconomic Imbalances and Economic Diplomacy

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  • Levy, Philip

    (Asian Development Bank Institute)

Abstract

The People’s Republic of China (PRC)’s current account surplus, its growing foreign exchange reserves, and its shifting policies on exchange rate adjustment have become a central preoccupation of United States (US) trade policy. The paper considers the evolving political economy of the US policy stance and of the PRC’s response; it assesses the opportunity costs of an approach that has sometimes focused on the exchange rate to the exclusion of other issues; and it explores the ramifications for economic governance in the short- and medium-run.

Suggested Citation

  • Levy, Philip, 2011. "The United States and the PRC: Macroeconomic Imbalances and Economic Diplomacy," ADBI Working Papers 328, Asian Development Bank Institute.
    • Handle: RePEc:ris:adbiwp:0328
    as

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    References listed on IDEAS

    as
    1. Barry Eichengreen & Gisela Rua, 2011. "Exchange Rates and Global Rebalancing," Finance Working Papers 23258, East Asian Bureau of Economic Research.
    2. Yiping Huang & Kunyu Tao, 2011. "Causes of and Remedies for the People’s Republic of China’s External Imbalances : The Role of Factor Market Distortion," Finance Working Papers 23257, East Asian Bureau of Economic Research.
    3. Ray C. Fair, 2010. "Estimated Macroeconomic Effects of a Chinese Yuan Appreciation," Cowles Foundation Discussion Papers 1755, Cowles Foundation for Research in Economics, Yale University.
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    5. William R. Cline & John Williamson, 2011. "Estimates of Fundamental Equilibrium Exchange Rates, May 2011," Policy Briefs PB11-5, Peterson Institute for International Economics.
    6. Ray C Fair, 2010. "Estimated Macroeconomic Effects of a Chinese Yuan Appreciation," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 45(4), pages 233-243, October.
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    8. Thorbecke, Willem & Komoto, Ginalyn, 2010. "Investigating the Effect of Exchange Rate Changes on Transpacific Rebalancing," ADBI Working Papers 247, Asian Development Bank Institute.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    macroeconomic imbalances; exchange rate adjustment; prc; united states; exchange rate adjustment;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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