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on China |
| By: | Chen, Kaiji (Emory University); Waggoner, Daniel F. (Federal Reserve Bank of Atlanta); Higgins, Patrick C. (Federal Reserve Bank of Atlanta); Zha, Tao (Federal Reserve Bank of Atlanta) |
| Abstract: | China monetary policy, as well as its transmission, is yet to be understood by researchers and policymakers. In the spirit of Taylor (1993, 2000), we develop a tractable framework that approximates practical monetary policy of China. The framework, grounded in relevant institutional elements, allows us to quantify the policy effects on output and prices. We find strong evidence that monetary policy is designed to support real GDP growth mandated by the central government while resisting inflation pressures and that contributions of monetary policy shocks to the GDP fluctuation are asymmetric across different states of the economy. These findings highlight the role of M2 growth as a primary instrument and the bank lending channel to investment as a key transmission mechanism for monetary policy. Our analysis sheds light on institutional constraints on a gradual transition from M2 growth to the nominal policy interest rate as a primary instrument for monetary policy. |
| Keywords: | monetary transmission; endogenous switching; central government; institutional rigidities; GDP growth target; lower growth bound; nonlinear VAR; systematic monetary policy; policy shocks; heavy industries; investment; bank loans; lending channel |
| JEL: | C13 C3 E02 E5 |
| Date: | 2016–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2016-09&r=cna |
| By: | Wladimir Andreff (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The present chapter first reminds in which circumstances Russian companies grew multinational and then started booming, and how they were muddling through the financial crisis that burst out in 2008; in this respect, they do not compare too bad with MNCs from other transition countries. The geographical and industrial specificities of their expansion abroad are pointed out as well as the major determinants of their outward foreign direst investment (OFDI). In the past decade, their strategies have evolved from total opacity to more transparency and, in some cases have matured enough to get closer to genuine global strategies while their relationships with the Russian government have strengthened. Thus Russian MNCs make up for major pillars of state capitalism in Russia. A comparative assessment with Chinese MNCs shows deeper similarities than differences in spite of the first mover advantage that has benefited to OFDI from China over OFDI from other transition economies, of which Russia. |
| Keywords: | outward foreign direct investment, multinational companies, BRICs, Russia, China |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01287431&r=cna |
| By: | Chang Shu; Dong He; Jinyue Dong; Honglin Wang |
| Abstract: | This paper compares spillovers from the US and Chinese financial markets to the rest of Asia-Pacific. Structural VAR analysis points to the growing influence of Chinese equities and currency movements. In normal times China's influence in the equity market has risen to a level close to that of the United States, although the relative impact of the United States became stronger in crisis periods. Nonetheless, China's bond market remains a negligible player. The influence of China may be interpreted as a "regional pull" factor, while that of the United States remains a key "global push" factor. |
| Keywords: | China's impact, spillovers to Asian financial markets, US, structural VAR, sign restrictions |
| Date: | 2016–09 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:579&r=cna |
| By: | C. Malgouyres |
| Abstract: | The rapid rise of Chinese exports over the past two decades has raised concerns about manufacturing jobs and wage inequality in high-income countries. Spill-overs beyond the manufacturing sector are an important issue given the large size of the non-traded sector in modern economies as well as the imperfect spatial mobility of households. In this paper, I estimate the impact of Chinese import competition onto the structure of employment and wages of local labor markets in France, with an emphasis on spill-overs effects beyond manufacturing and the degree of local wage inequality. Local employment and total labor income in both manufacturing and non-manufacturing are negatively affected by rising exposure to imports. The estimates imply that each local manufacturing job destroyed by Chinese import competition results in the loss of about 1.5 local job outside of manufacturing. These substantial “local multiplier effects” are however much lower when expressed in terms of hours worked or earnings rather than job count. Import competition from China polarized the local structure of employment in the manufacturing sector. The wage distribution is uniformly negatively affected in manufacturing while the non-traded sector experiences wage polarization, i.e. a rise in upper-tail inequality and a decline in bottom-tail inequality. While overall wage inequality is on average not affected, I show that it increased in response to trade shocks in areas where the minimum wage is only weakly binding. |
| Keywords: | wage distribution, international trade, import competition, local labor markets. |
| JEL: | F16 J23 J31 R11 R23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:bfr:banfra:603&r=cna |
| By: | Frankel, Jeffrey (Harvard University) |
| Abstract: | Two big questions look somewhat different than they did 10 or 20 years ago. First: would the long-term trend of globalization continue? Contrary to all predictions, trade growth has slowed markedly since the Global Financial Crisis of 2008-09. But the feared increase in protectionism did not materialize, so one must look elsewhere for explanations. Two likely factors behind the slowdown in trade are a maturing of global supply chains and a slowdown in trade-intensive physical investment. Second, would the rapid growth of emerging market economies (EMEs) continue, and which ones? Most EMEs recovered strongly in 2010-11, but now seem to be slowing down in a more long-lasting way. For both these issues the role of China is crucial, since it now carries so much weight in the global economy. Breathless reports in 2014 that the Chinese economy had overtaken the US economy as the world?s largest (measured by Purchasing Power Parity) were followed rapidly in 2015 by breathless reports that its economy was failing. That China has slowed down from past growth rates of 10% to a more moderate rate of 7% or lower should not have come as a surprise. It is part of a natural process of long-term convergence and involves a "rebalancing" of the economy from manufacturing into services that is desirable, even if it means a loss of export markets for some others. The open question is whether the Chinese transition to a more moderate and sustainable growth path will take the form of a hard landing or a soft landing. |
| Date: | 2016–06 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:16-029&r=cna |