The People's Republic of China's Growth, Stability, and Use of International Reserves

28 Pages Posted: 28 Jan 2014

See all articles by Joshua Aizenman

Joshua Aizenman

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

Yothin Jinjarak

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

Nancy Peregrim Marion

Dartmouth College - Department of Economics

Date Written: January 27, 2014

Abstract

In the run-up to the financial crisis, the world economy was characterized by large and growing current account imbalances. Since the onset of the crisis, the People’s Republic of China and the United States have rebalanced. As a share of gross domestic product, their current account imbalances are now less than half their pre-crisis levels. For the People’s Republic of China, the reduction in its current account surplus post-crisis suggests a structural change. Panel regressions for a sample of almost 100 economies over the thirty-year period, 1983-2013, confirm that the relationship between current account balances and economic variables such as performance, structure, wealth, and the exchange rate, changed in important ways after the financial crisis.

Keywords: current account imbalances, structural change, financial crisis, PRC, international reserves

JEL Classification: F32; O57

Suggested Citation

Aizenman, Joshua and Jinjarak, Yothin and Marion, Nancy P., The People's Republic of China's Growth, Stability, and Use of International Reserves (January 27, 2014). ADBI Working Paper 455. Available at SSRN: https://ssrn.com/abstract=2385837 or http://dx.doi.org/10.2139/ssrn.2385837

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
United States

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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