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China’s Growth, Stability, and Use of International Reserves

  • Joshua Aizenman

    ()

  • Yothin Jinjarak

    ()

  • Nancy Marion

    ()

Since the onset of the global financial crisis, China and the U.S. have reduced their current-account imbalances as a share of GDP to less than half their pre-crisis levels. For China, the reduction in its current-account surplus post-crisis suggests a structural change. Panel regressions for a sample of almost 100 countries over 1983–2013 confirm that the relationship between current-account balances and economic variables changed in important ways after the financial crisis. China’s rebalancing has been accompanied by a decline in its reserves-to-GDP ratio and greater outward FDI that, in turn, has mitigated reserve hoarding. Copyright Springer Science+Business Media New York 2014

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File URL: http://hdl.handle.net/10.1007/s11079-014-9308-x
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 25 (2014)
Issue (Month): 3 (July)
Pages: 407-428

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Handle: RePEc:kap:openec:v:25:y:2014:i:3:p:407-428
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100323

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