Rebalancing Growth in China: An International Perspective

CEPII Working Paper, N°2011-08, April 2011

51 Pages Posted: 28 May 2015

See all articles by Agnès Bénassy-Quéré

Agnès Bénassy-Quéré

Paris School of Economics (University Paris 1)

Benjamin Carton

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)

Ludovic Gauvin

Banque de France; Université Paris Ouest - Nanterre, La Défense - EconomiX

Date Written: April 2011

Abstract

Based on simulations of an original DGE model of the US, Chinese and Euro area economies with financial frictions and various monetary regimes, the paper shows that the contribution of China in global rebalancing should primarily rely on structural policies aiming at reducing aggregate savings in China. The role of the exchange-rate regime would be minor under standard monetary policies, although more important if monetary policies in advanced countries are constrained, as they are today. Finally, relying only on a change in China’s monetary regime (without structural reforms) could end up in delaying rather than accelerating the rebalancing, depending on China’s policy regarding accumulated reserves.

Keywords: Global imbalances, exchange rate regimes, capital controls, China

JEL Classification: F32, F42, F47

Suggested Citation

Benassy-Quere, Agnes and Carton, Benjamin and Gauvin, Ludovic, Rebalancing Growth in China: An International Perspective (April 2011). CEPII Working Paper, N°2011-08, April 2011, Available at SSRN: https://ssrn.com/abstract=2611045 or http://dx.doi.org/10.2139/ssrn.2611045

Agnes Benassy-Quere (Contact Author)

Paris School of Economics (University Paris 1) ( email )

106-112 boulevard de l'Hopital
Paris, F-75013
France
+33 1 44 07 82 19 (Phone)

HOME PAGE: http://www.parisschoolofeconomics.com/benassy-quere-agnes/agnesb.html

Benjamin Carton

Centre d'Etudes Prospectives et d'Info. Internationales (CEPII) ( email )

9 rue Georges Pitard
Paris Cedex 15, F-75015
France

Ludovic Gauvin

Banque de France ( email )

Paris
France

Université Paris Ouest - Nanterre, La Défense - EconomiX ( email )

200 Avenue de la République
Nanterre cedex, Nanterre Cedex 92000
France

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