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3542. The European Union and China
- Author:
- Roberto Menotti
- Publication Date:
- 04-2007
- Content Type:
- Working Paper
- Institution:
- Lowy Institute for International Policy
- Abstract:
- The EU is a newcomer to East Asian affairs, but its stake in the region is growing rapidly in light of China's economic clout. The European approach to China's rise differs profoundly from that of the US, due to geopolitical realities and a general belief in the benign effects of economic interdependence.
- Topic:
- Foreign Policy and Economics
- Political Geography:
- China, East Asia, and Asia
3543. The Case for Exchange Rate Flexibility in Oil-Exporting Economies
- Author:
- Brad Setser
- Publication Date:
- 11-2007
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Brad Setser is a fellow at the Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations. He previously worked as a senior economist at RGEMonitor, an online financial information service. He served in the US Treasury Department from 1997 to 2001, where he concluded his tenure as the acting director of the Office of International Monetary and Financial Policy, and spent 2002 as a visiting scholar at the International Monetary Fund. He is the coauthor of Bailouts or Bail-ins? Responding to Financial Crises in Emerging Economies (Institute for International Economics, 2004) with Nouriel Roubini.
- Topic:
- Economics, Foreign Exchange, International Trade and Finance, and Oil
- Political Geography:
- United States
3544. China and Economic Integration in East Asia: Implications for the United States
- Author:
- C. Fred Bergsten
- Publication Date:
- 03-2007
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- East Asia is clearly, if gradually and unevenly, moving toward regional economic integration. Market forces are leading the process, as firms construct production chains across the area that exploit the comparative advantage of its individual countries. Governments are now moving to build on those forces, and consolidate them, through a series of formal agreements to intensify their economic relationships and start creating an East Asian Community.
- Topic:
- Development and Economics
- Political Geography:
- United States, China, Israel, East Asia, and Asia
3545. Global Imbalances: Time for Action
- Author:
- William R. Cline, John Williamson, Yung Chul Park, Alan J. Ahearne, Kyung Tae Lee, and Jean Pisani-Ferry
- Publication Date:
- 03-2007
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- One of the principal dangers currently facing the world economy arises from the large and unsustainable imbalances in current account positions. Some observers argue that these imbalances will unwind gradually and nondisruptively, while others emphasize the risks of a sudden change of sentiment in financial markets that could result in an abrupt and damaging adjustment. No one knows which scenario will materialize, but a priori for policymakers should be to reduce the risks of a crisis, which could produce a world recession and disruptions to the global trading system. For that, the global economy requires official sponsorship of a credible, comprehensive adjustment program. This policy brief outlines such a program.
- Topic:
- Development, Economics, Globalization, and International Trade and Finance
3546. Merry Sisterhood or Guarded Watchfulness? Cooperation Between the International Monetary Fund and the World Bank
- Author:
- Michael Fabricius
- Publication Date:
- 12-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Since their inception at the end of the Second World War, the sister organizations of the World Bank and the International Monetary Fund (IMF) have aimed to consistently speak with one voice vis-à-vis their member governments. However, anecdotal evidence suggests that they often do not speak in one voice. Fabricius draws on field research conducted in Ghana, Pakistan, Peru, and Vietnam to identify the conditions that determine whether or not the organizations are indeed on the same page and to address whether their traditional plea for consistency is always desirable. He recommends which measures seem crucial to ensure Bank-Fund consistency. At the same time he argues that under certain conditions, this consistency may lead to policy choices that are only second-best. He proposes that the Bank and the Fund pursue a case-specific approach in deciding whether they should take the same stance. A more flexible approach may increase not only the ownership of borrowing countries but also the sustainability of policy choices.
- Topic:
- Development, Economics, International Organization, and International Trade and Finance
- Political Geography:
- Pakistan, Vietnam, Peru, and Ghana
3547. Exit Polls: Refugee Assessments of North Korea's Transition
- Author:
- Stephan Haggard, Marcus Noland, and Yoonok Chang
- Publication Date:
- 12-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Results from a survey of more than 1,300 North Korean refugees in China provide insight into changing economic conditions in North Korea. There is modest evidence of slightly more positive assessments among those who exited the country following the initiation of reforms in 2002. Education breeds skepticism; higher levels of education were associated with more negative perceptions of economic conditions and reform efforts. Other demographic markers such as gender or provincial origin are not robustly correlated with attitudes. Instead, personal experiences appear to be central: A significant number of the respondents were unaware of the humanitarian aid program and the ones who knew of it almost universally did not believe that they were beneficiaries. This group's evaluation of the regime, its intentions, and accomplishments is overwhelmingly negative—even more so than those of respondents who report having had experienced incarceration in political detention facilities—and attests to the powerful role that the famine experience continues to play in the political economy of the country.
- Topic:
- Development, Economics, and Politics
- Political Geography:
- China, North Korea, and Korea
3548. Congress, Treasury, and the Accountability of Exchange Rate Policy: How the 1988 Trade Act Should Be Reformed
- Author:
- Randall Henning
- Publication Date:
- 09-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- The controversy within the United States over Chinese exchange rate policy has generated a series of legislative proposals to restrict the discretion of the Treasury Department in determining currency manipulation and to reform the department's accountability to Congress. This paper reviews Treasury's reports to Congress on exchange rate policy—introduced by the 1988 Trade Act—and Congress's treatment of them. It finds that the accountability process has often not worked well in practice: The reports provide only a partial basis for effective congressional oversight. For its part, Congress held hearings on less than half of the reports and overlooked some important substantive issues. Several recommendations can improve guidance to the Treasury, standards for assessment, and congressional oversight. These include (1) refining the criteria used to determine currency manipulation and writing them into law, (2) explicitly harnessing US decisions on manipulation to the International Monetary Fund's rules on exchange rates, (3) clarifying the general objectives of US exchange rate policy, (4) reaffirming the mandate to seek international macroeconomic and currency cooperation, (5) requiring Treasury to lead an executivewide policy review, and (6) institutionalizing multicommittee oversight of exchange rate policy by Congress. Legislators should strengthen reporting and oversight of broader exchange rate policy in addition to strengthening the provisions targeting manipulation.
- Topic:
- Economics, Foreign Exchange, and International Trade and Finance
- Political Geography:
- United States and China
3549. Measurement and Inference in International Reserve Diversification
- Author:
- Anna Wong
- Publication Date:
- 07-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This paper analyzes international reserve diversification by examining changes in quantity shares of currencies held in foreign exchange reserves. It discusses alternative methodologies for constructing quantity shares and applies the preferred methodology to three sets of data on the currency composition of foreign exchange reserves: quarterly aggregate International Monetary Fund's Composition of Foreign Exchange Reserves (IMF COFER) data, quarterly IMF COFER data for industrial- and developing-country groups, and annual data for 23 individual countries that disclose the currency composition of their foreign exchange reserve holdings. What can one infer from available data about the diversification of foreign exchange reserves since 1999? The analysis suggests four conclusions: (1) The behavior of the quantity shares of the US dollar and the euro in total reserves is consistent with net stabilizing intervention; their quantity shares tend to rise when these currencies are declining and vice versa. (2) The principal driver of this stabilizing diversification over the period 1999Q1–2005Q4 is Japan. (3) The industrial countries as a group but excluding Japan do not indicate stabilizing diversification. (4) The nonindustrial countries as a group display stabilizing diversification over short periods of only a few quarters. In summary, the aggregate data conceal much diversity in the practices of individual countries.
- Topic:
- Economics, Foreign Exchange, and International Trade and Finance
- Political Geography:
- United States, Japan, and Asia
3550. A (Lack of) Progress Report on China's Exchange Rate Policies
- Author:
- Morris Goldstein
- Publication Date:
- 06-2007
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- This working paper assesses the progress made in improving China's exchange rate policies over the past five years (that is, since 2002). I first discuss four indicators of progress on China's external imbalance and its exchange rate policies—namely, the change in (and level of) China's global current account position, movements in the real effective exchange rate of the renminbi (RMB), the role of market forces in the determination of the RMB, and China's compliance with its obligations on exchange rate policy as a member of the International Monetary Fund (IMF). I then discuss why the lack of progress in improving China's exchange rate policies matters for the economies of the China and the United States and for the international monetary and trading system. I also argue that several popular arguments and excuses for why more cannot be accomplished on removing the large undervaluation of the RMB are unpersuasive. Finally, I consider what can and should be done by China, the United States, and the IMF to accelerate progress over the next year or two.
- Topic:
- Development, Economics, and Foreign Exchange
- Political Geography:
- United States, China, and Asia