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

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  • Philip Levy

    (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

  • Philip Levy, 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. 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.
    2. 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.
    3. María Jesús Herrerias & Vicente Orts, 2010. "Is the Export-led Growth Hypothesis Enough to Account for China's Growth?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(s1), pages 34-51.
    4. Barry Eichengreen & Gisela Rua, 2011. "Exchange Rates and Global Rebalancing," Macroeconomics Working Papers 23258, East Asian Bureau of Economic Research.
    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. Willem Thorbecke & Ginalyn Komoto, 2010. "Investigating the Effect of Exchange Rate Changes on Transpacific Rebalancing," ADBI Working Papers 247, Asian Development Bank Institute.
    7. 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.
    8. Qingyuan Du & Shang-Jin Wei, 2010. "A Sexually Unbalanced Model of Current Account Imbalances," NBER Working Papers 16000, National Bureau of Economic Research, Inc.
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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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