China's Growth, Stability, and Use of International Reserves

34 Pages Posted: 20 Dec 2013

See all articles by Joshua Aizenman

Joshua Aizenman

University of Southern California - Department of Economics; National Bureau of Economic Research (NBER)

Yothin Jinjarak

Victoria University of Wellington - School of Economics & Finance

Yothin Jinjarak

University of London - SOAS - Department of Financial and Management Studies

Nancy Peregrim Marion

Dartmouth College - Department of Economics

Date Written: December 2013

Abstract

Since the onset of the global financial crisis, China and the U.S. have reduced their current-account imbalances as a share of GDP to less than half their pre-crisis levels. For China, the reduction in its current-account surplus post-crisis suggests a structural change. Panel regressions for a sample of almost 100 countries over 1983-2013 confirm that the relationship between current-account balances and economic variables changed in important ways after the financial crisis. China's rebalancing has been accompanied by a decline in its reserves-to-GDP ratio and greater outward FDI that, in turn, has mitigated reserve hoarding.

Suggested Citation

Aizenman, Joshua and Jinjarak, Yothin and Jinjarak, Yothin and Marion, Nancy P., China's Growth, Stability, and Use of International Reserves (December 2013). NBER Working Paper No. w19739. Available at SSRN: https://ssrn.com/abstract=2370195

Joshua Aizenman (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Yothin Jinjarak

Victoria University of Wellington - School of Economics & Finance ( email )

P.O. Box 600
Wellington 6001
New Zealand

Yothin Jinjarak

University of London - SOAS - Department of Financial and Management Studies ( email )

College Buildings
Russell Square
London, WC1H 0XG
United Kingdom

HOME PAGE: http://https://sites.google.com/site/yothinjinjarak/

Nancy P. Marion

Dartmouth College - Department of Economics ( email )

Hanover, NH 03755
United States
(603) 646-2511 (Phone)

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