Category Archives: international

Chinese Trade: An Update

I was surprised by this item from the BBC:

Chinese trade surplus at new high

Wednesday, 10 September 2008

China’s trade surplus hit a monthly record of $28.7bn (£16.28bn) in August as the gap with the US and Europe widened, despite weaker world demand.

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Trade Deficit Reduction via Changes in Exports, Imports or Prices

Today’s July trade release was a little bit of a surprise, due to oil [0]; Haver covers the numbers. Calculated Risk discussed the release, and actually took the outcome as a fairly positive, albeit with some anxiety about whether exports will keep up the robust growth necessary to continue shrinking the deficit.

I want to focus on a couple of other aspects of the release which seem to make me worry a bit more.

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Taylor Rules, Synchronized Recession and the Potential for Competitive Depreciation

In yesterday’s FT, “All in this together” assessed the possibility of a roughly synchronized downturn in the world’s major economies, with the United States, ironically enough, suffering the smallest hit. This brings up all sorts of interesting questions regarding exchange rates, if one believes that Taylor rules define monetary policy making to some degree, and that interest differentials affect exchange rates.

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