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262. The Sustainability of China's Recovery from the Global Recession
- Author:
- Nicholas R. Lardy
- Publication Date:
- 03-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- China's policy response to the global financial and economic crisis was early, large, and well-designed. Although Chinese financial institutions had little exposure to the toxic financial assets that brought down many large Western investment banks and other financial firms, China's leadership recognized that its dependence on exports meant that it was acutely vulnerable to a global recession. Thus they did not subscribe to the view sometimes described as “decoupling,” the idea that Asian countries could passively weather the financial storm that originated in the United States and other advanced industrial economies. They understood that absent a vigorous policy response China inevitably would suffer from the backwash of a sharp economic slowdown in its largest export markets—the United States and Europe.
- Topic:
- Economics and Financial Crisis
- Political Geography:
- United States, China, Europe, and Asia
263. Copenhagen, the Accord, and the Way Forward
- Author:
- Trevor Houser
- Publication Date:
- 03-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Now that the dust has settled from the UN climate change conference in Copenhagen last December and countries have chosen whether or not to sign up to the Copenhagen Accord that resulted, it's a good time to step back and take stock.
- Topic:
- Climate Change, Environment, International Cooperation, Treaties and Agreements, and United Nations
264. After the Flop in Copenhagen
- Author:
- Gary Clyde Hufbauer
- Publication Date:
- 03-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Despite high drama, the United Nations Framework Convention on Climate Change (UNFCCC) conference, held in Copenhagen between December 7 and 18, 2009, ended as a flop. The failure to secure a comprehensive treaty came as no surprise: hopes for the Copenhagen conference to wrap up two years of negotiations with a successor treaty to the Kyoto Protocol had faded long before December. But it was still disappointing that so little was accomplished, especially after President Barack Obama, Premier Wen Jiabao, and over 100 world leaders decided (at the last moment) to join thousands of delegates, environmentalists, and climate activists in Copenhagen. Our own benchmarks for a reasonable outcome from Copenhagen include much greater specificity as to targets, time paths, and control measures by major emitting countries; more detailed commitments on financial support and conditionality terms for developing countries; and acceptance by all major emitters, whether developed or developing countries, of robust and independent monitoring, reporting, and verification (MRV) standards. We do not place great stress on the legal form of the ultimate agreement, whether a treaty or a political accord or something in between (Werksman and Herbertson 2009), but we do think the sense of obligation must be equivalent between all major emitters. Again, equivalence was not achieved.
- Topic:
- Climate Change, Environment, International Cooperation, Treaties and Agreements, and United Nations
265. Notes on Equilibrium Exchange Rates: January 2010
- Author:
- William R. Cline and John Williamson
- Publication Date:
- 01-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- In June 2009 we issued our annual update of estimates of fundamental equilibrium exchange rates (FEERs) for 34 major economies (Cline and Williamson 2009). At that time the dollar had already begun correction from the substantial overvaluation that had arisen from the strong safe-haven effect associated with the global financial crisis of 2008–09. In this policy brief we report on changes in disequilibria in the exchange markets since the date those earlier calculations referred to, namely March 2009. We first present estimates of the extent of movement toward FEER-consistent bilateral dollar exchange rates from March to December 31, 2009, and then look at how effective exchange rates have altered in the same period. We also re-estimate the FEER-consistent dollar rate for one important currency, the Korean won.
- Topic:
- Economics, Foreign Exchange, International Political Economy, and Monetary Policy
- Political Geography:
- Korea
266. New PPP-Based Estimates of Renminbi Undervaluation and Policy Implications
- Author:
- Arvind Subramanian
- Publication Date:
- 04-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Is there reason to add to the proliferating set of estimates on the extent of renminbi undervaluation (see among others, Bergsten 2010; Cline and Williamson 2008 and 2010; Goldstein and Lardy 2008 and 2009; Frankel 2008; Reisen 2009; and Lee et al. 2008)? Yes, not least because these new estimates: (1) suggest that purchasing power parity (PPP)-based approaches to measuring renminbi undervaluation suggest that China's currency is undervalued by about 30 percent against the dollar and not the 12 percent recently reported (Bajaj 2010); and (2) are closer to and consistent with alternative approaches to estimating renminbi undervaluation.
- Topic:
- Economics, Foreign Exchange, International Political Economy, and Monetary Policy
- Political Geography:
- China
267. The Substitution Account as a First Step Toward Reform of the International Monetary System
- Author:
- Peter B. Kenen
- Publication Date:
- 03-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Today, the international monetary system is based largely on the US dollar, but reserve currency diversification has begun, thanks to the advent of the euro, and it is apt to continue. Eventually, the renminbi could acquire reserve currency status, and the resulting reserve currency diversification could be more disruptive than it has been to date. To forestall that possibility the quasi-currency issued by the International Monetary Fund (IMF), Special Drawing Rights (SDRs), could be made to play a larger role in the international monetary system, precluding potentially disruptive diversification and achieving more orderly growth in the stock of international reserves.
- Topic:
- Economics, International Political Economy, International Trade and Finance, and Monetary Policy
- Political Geography:
- United States
268. The Winter of Their Discontent: Pyongyang Attacks the Market
- Author:
- Stephan Haggard and Marcus Noland
- Publication Date:
- 01-2010
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- On November 30, 2009, North Korea announced a reform to replace all currency in circulation with new bills and coins. North Korean officials have made no bones about their motivations: The “reform” constitutes a direct attack on the emerging market economy and the independence from state control that it represents. In an interview following the conversion, an official of the North Korean central bank noted that the reform was aimed at curbing private trade and underlined that North Korea is “not moving toward a free market economy but will further strengthen the principle and order of socialist economic management.”
- Topic:
- Economics, Markets, and Monetary Policy
- Political Geography:
- North Korea
269. The Design and Effects of Monetary Policy in Sub-Saharan African Countries
- Author:
- Mohsin S. Khan
- Publication Date:
- 07-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Since the 1990s there have been a number of major changes in the design and conduct of monetary policy. In a globalized environment, there is less time to adjust to shocks and greater need to achieve closer convergence of economic performance among trading partners. As a result, a number of developing countries have adopted exchange rate regimes with more flexibility, and thereby greater scope for monetary policy. Notable examples include a number of sub-Saharan African countries moving from fixed exchange-rate regimes to more flexible regimes and the adoption of formal or informal inflation targeting regimes by some of these countries. These changes have triggered considerable debate on how monetary policy should be conducted and the effects it has on the real economy.
- Topic:
- Economics and Monetary Policy
- Political Geography:
- Africa
270. Wholesalers and Retailers in US Trade
- Author:
- J. Bradford Jensen, Andrew B. Bernard, Peter K. Schott, and Stephen J. Redding
- Publication Date:
- 06-2010
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- International trade models typically assume that producers in one country trade directly with final consumers in another. In reality, of course, trade can involve long chains of potentially independent actors who move goods through wholesale and retail distribution networks. These networks likely affect the magnitude and nature of trade frictions and hence both the pattern of trade and its welfare gains. To promote further understanding of the means by which goods move across borders, this paper examines the extent to which US exports and imports flow through wholesalers and retailers versus producing and consuming firms.
- Topic:
- Economics, International Trade and Finance, and Markets
- Political Geography:
- United States