That’s from Bloomberg. Ya gotta wonder who’s running the show there.
Category Archives: China
China’s tetralemma
Many countries have three policy objectives: (1) being able to set their own monetary policy, in order to keep their own inflation and unemployment at desired levels; (2) having a stable exchange rate, in order to avoid disruptive shifts in exports or imports; and (3) allowing free capital flows, in order to help the country’s citizens and firms find the most efficient sources and uses of capital. But the famous policy trilemma of international economics claims that any country is going to be forced to give up on one of those three goals.
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Treasury Semi-Annual Report to Congress on Foreign Exchange Policies Released
The report, released yesterday, is here.
Is China’s Currency Undervalued? A Reality Check
Short answer: maybe, but probably not.
What If China Gave Mr. Trump What He Says He Wants: A Stronger Chinese Currency
Well, given the trilemma, and limits to capital control efficacy, it’ll mean more PBoC decumulation of US Treasurys, and holding all else constant, higher long term interest rates.
The US-China Bilateral Trade Balance in Value Added
As the Administration mulls over possible trade actions against China, it is important to concede official trade statistics do provide in some sense a misleading picture of US-China bilateral trade — but not misleading in a way such that if corrected bolsters the Administration’s arguments.
A New Approach to Tackling Chinese Currency Manipulation That I Do Not Understand
From Bloomberg:
President Donald Trump’s administration is considering a new tactic to discourage China from undervaluing its currency that falls short of a direct confrontation…
Chinese Forex Reserves Continue Declining
Hard to argue the PBoC is manipulating the yuan to keep it weak, especially as capital controls are being tightened. But who listens to facts any more?
A 10% Across-the-Board Tariff?
Today the idea of a 10% across-the-board tariff rate increase was mooted. As Noland et al. (2016), pp.9-10 observe, the President has authority to undertake such measures. However, as a member of the WTO, other members have a right to dispute. More likely, they’ll retaliate.
Trade Policy with China
Since President-elect Trump has nominated Peter Navarro* to direct the newly formed Trade Policy Council, now seems a good time to review some trade data.