Today I discuss the factors that brought oil prices so far down and more recently back up.
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Category Archives: China
Far Left-Far Right Protectionist Dreams
As noted in this post, both Senator Sanders and Mr. Trump share a belief that China should be declared a currency manipulator, so that heavy tariffs can be imposed (Secretary Clinton’s position here). Not that it matters to either individuals’ beliefs, but — based on ongoing research I am conducting with Yin-Wong Cheung (CUHK) and Xin Nong (UW) — the evidence that China is currently manipulating its currency to keep it undervalued is not particularly persuasive.
China: The Trilemma and Reserves, Again
From Bloomberg:
The yuan strengthened after China’s central bank raised its fixing for a fourth day and data showed a less-than-estimated drop in the nation’s foreign-exchange reserves.
Chinese Foreign Currency External Debt
One constraint on devaluation as a means of stimulating the economy comes from the balance sheet. When there is a big stock of external debt denominated in foreign currency, a devaluation increases the amount of debt evaluated in domestic currency terms, potentially driving some firms into insolvency. How does China look in these terms?
China Navigates the Trilemma (and Slowing Growth)
Benn Steil and Emma Smith at the Council on Foreign Relations present an interesting picture of Chinese reserves.
Guest Contribution: “Does China’s Capital Flight respond to US Monetary Policy?”
Today we are fortunate to present a guest contribution written by Yin-Wong Cheung (City University of Hong Kong), Sven Steinkamp (Universität Osnabrück) and Frank Westermann (Universität Osnabrück).
Can lower oil prices cause a recession?
Donald Luskin writes in the Wall Street Journal:
The global economy is slipping into recession. The evidence is showing up in all the usual ways: slowing output growth, slumping purchasing-manager indexes, widening credit spreads, declining corporate earnings, falling inflation expectations, receding capital investment and rising inventories. But this is a most unusual recession– the first one ever caused by falling oil prices.
Guest Contribution: “China’s Slowdown”
Today we are fortunate to have a guest contribution written by Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at Harvard University, and former Member of the Council of Economic Advisers, 1997-99. An earlier version was published by Project Syndicate.
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The RMB’s Future: Four Views
At the last ASSA meetings in San Francisco, I participated in a Society for the Study of Emerging Markets panel entitled “Can the Chinese Renminbi Rule?: If So, How and When?”
World oil supply and demand
According to the Energy Information Administration’s Monthly Energy Review database, world field production of crude oil in September was up 1.5 million barrels a day over the previous year. More than all of that came from a 440,000 b/d increase in the U.S., 550,000 b/d from Saudi Arabia, and 900,000 b/d from Iraq. If it had not been for the increased oil production from these three countries, world oil production would actually have been down almost 400,000 b/d over the last year.
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