Carnegie Endowment for International Peace
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A simple model can help illustrate the problems that China will face over the coming decade.
Because savings and investment must always balance, the idea that the savings rate in any country is determined at home is nonsense.
While it is difficult to predict the nature and timing of the shocks buffeting China’s economy, China’s difficult economic situation makes such crises inevitable.
Some analysts contend that the RMB is no longer undervalued but is in fact overvalued. However, a more careful analysis suggests that the yuan is still undervalued, but perhaps not by much.
The structure of investment strategies in the Chinese stock markets had always guaranteed that this would be a brutally volatile market that trades almost exclusively on “the consensus about the consensus”, and therefore prices will reflect very rapid shifts in this consensus.
Although China’s stock market panic in the summer of 2015 has subsided, the fundamental questions have not been resolved, which leaves it open to possible continued volatility.
Why Alexander Hamilton should remain on the ten dollar bill.
A deep grounding in economic and financial history is important for modern economic analysis.
The value placed on current and future growth says a lot about the quality of that growth. It also has important policy implications, especially for reforms.
For now, for all the excited chatter, the Asia Infrastructure Investment Bank is an institution laden with symbolic value and little else.