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Rebalancing Growth in China: An International Perspective

Author

Listed:
  • Agnès Bénassy-Quéré
  • Benjamin Carton
  • Ludovic Gauvin

Abstract

Based on simulations of an original DGE model of the US, Chinese and Euro area economies with financial frictions and various monetary regimes, the paper shows that the contribution of China in global rebalancing should primarily rely on structural policies aiming at reducing aggregate savings in China. The role of the exchange-rate regime would be minor under standard monetary policies, although more important if monetary policies in advanced countries are constrained, as they are today. Finally, relying only on a change in China’s monetary regime (without structural reforms) could end up in delaying rather than accelerating the rebalancing, depending on China’s policy regarding accumulated reserves.

Suggested Citation

  • Agnès Bénassy-Quéré & Benjamin Carton & Ludovic Gauvin, 2011. "Rebalancing Growth in China: An International Perspective," Working Papers 2011-08, CEPII research center.
    • Handle: RePEc:cii:cepidt:2011-08
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    Cited by:

    1. Cheng, Gong, 2015. "A Growth Perspective On Foreign Reserve Accumulation," Macroeconomic Dynamics, Cambridge University Press, vol. 19(6), pages 1358-1379, September.
    2. van Treeck, Till. & Sturn, Simon., 2012. "Income inequality as a cause of the Great Recession? : A survey of current debates," ILO Working Papers 994709343402676, International Labour Organization.
    3. Damien Cubizol, 2017. "Rebalancing in China: a taxation approach," Working Papers 1732, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    4. Keddad, Benjamin & Sato, Kiyotaka, 2022. "The influence of the renminbi and its macroeconomic determinants: A new Chinese monetary order in Asia?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 79(C).
    5. repec:ilo:ilowps:470934 is not listed on IDEAS
    6. YUAN, Chunming & CHEN, Ruo, 2015. "Policy transmissions, external imbalances, and their impacts: Cross-country evidence from BRICS," China Economic Review, Elsevier, vol. 33(C), pages 1-24.
    7. Keddad, Benjamin, 2019. "How do the Renminbi and other East Asian currencies co-move?," Journal of International Money and Finance, Elsevier, vol. 91(C), pages 49-70.
    8. repec:hal:pseose:hal-00825239 is not listed on IDEAS
    9. Cubizol, Damien, 2018. "Transition and capital misallocation: the Chinese case," Journal of International Money and Finance, Elsevier, vol. 81(C), pages 88-115.
    10. Bénassy-Quéré, Agnès & Carton, Benjamin & Gauvin, Ludovic, 2013. "China and global rebalancing: A two-country approach," China Economic Review, Elsevier, vol. 26(C), pages 118-139.
    11. Luigi Bonatti & Andrea Fracasso, 2016. "Modelling The Transition Towards The Renminbi'S Full Convertibility: Implications For China'S Growth," Bulletin of Economic Research, Wiley Blackwell, vol. 68(S1), pages 146-170, December.
    12. Jean Pisani-Ferry & Ignazio Angeloni & André Sapir & Zsolt Darvas & Agnès Bénassy-Quéré & Shahin Vallée, . "Global currencies for tomorrow- a European perspective," Bruegel Blueprints, Bruegel, number 592.
    13. Damien Cubizol, 2017. "Transition and capital misallocation: the Chinese case," Working Papers halshs-01176919, HAL.
    14. Cubizol, Damien, 2020. "Rebalancing in China: A taxation approach," China Economic Review, Elsevier, vol. 60(C).
    15. Verikios, George, 2015. "The Implications for Trade And FDI Flows From Liberalisation of China’s Capital Account," Conference papers 332655, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

    More about this item

    Keywords

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    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

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