IDEAS home Printed from https://ideas.repec.org/p/cop/wpaper/g-192.html
   My bibliography  Save this paper

Will an Appreciation of the Renminbi Rebalance the Global Economy? A Dynamic Financial CGE Analysis

Author

Listed:
  • Jingliang Xiao
  • Glyn Wittwer

Abstract

We use a dynamic CGE model of China with a financial module and sectoral detail to examine the real and nominal impacts of a nominal exchange rate appreciation alone, fiscal policy alone and a combined fiscal and monetary package to redress China's external imbalance. The exchange rate policy alone is ineffective in both the short run and long run at reducing China's current account surplus. Fiscal policy is less effective than a combination of fiscal and monetary policy in reducing the surplus.

Suggested Citation

  • Jingliang Xiao & Glyn Wittwer, 2009. "Will an Appreciation of the Renminbi Rebalance the Global Economy? A Dynamic Financial CGE Analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-192, Victoria University, Centre of Policy Studies/IMPACT Centre.
  • Handle: RePEc:cop:wpaper:g-192
    as

    Download full text from publisher

    File URL: http://www.copsmodels.com/ftp/workpapr/g-192.pdf
    File Function: Initial version, 2009-11
    Download Restriction: no

    File URL: http://www.copsmodels.com/elecpapr/g-192.htm
    File Function: Local abstract: may link to additional material.
    Download Restriction: no

    References listed on IDEAS

    as
    1. Horridge, Mark & Wittwer, Glyn, 2008. "SinoTERM, a multi-regional CGE model of China," China Economic Review, Elsevier, vol. 19(4), pages 628-634, December.
    2. XING, Yuqing, 2006. "Why is China so attractive for FDI? The role of exchange rates," China Economic Review, Elsevier, vol. 17(2), pages 198-209.
    3. Ronald McKinnon & Gunther Schnabl, 2009. "China's financial conundrum and global imbalances," BIS Working Papers 277, Bank for International Settlements.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    dynamic financial CGE; foreign reserves; trade surplus; monetary policy; fiscal policy;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-192. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Horridge). General contact details of provider: http://edirc.repec.org/data/cpmonau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.