{"id":2821,"date":"2017-03-09T15:43:38","date_gmt":"2017-03-09T08:43:38","guid":{"rendered":"http:\/\/se.dotv.vn\/?p=2821"},"modified":"2017-03-21T05:12:52","modified_gmt":"2017-03-20T22:12:52","slug":"stbi-16-03-2017-costs-and-benefits-of-sterilized-foreign-exchange-intervention-i-e-exchange-rate-protection-in-china-in-the-2000s-2","status":"publish","type":"post","link":"https:\/\/se.dotv.vn\/en\/stbi-16-03-2017-costs-and-benefits-of-sterilized-foreign-exchange-intervention-i-e-exchange-rate-protection-in-china-in-the-2000s-2\/","title":{"rendered":"[STBI-16-03-2017] Costs and Benefits of Sterilized Foreign Exchange Intervention (i.e. Exchange Rate Protection) in China in the 2000s"},"content":{"rendered":"<p style=\"text-align: center;\"><strong>Prof.\u00a0James Riedel &#8211; Johns Hopkins University<\/strong><\/p>\n<p style=\"text-align: center;\">11h00 on Thursday, March 16th, 2017<\/p>\n<p style=\"text-align: center;\">School of Economics &#8211; Dubai Palace<\/p>\n<p style=\"text-align: center;\">H.001 &#8211; 1A Ho\u00e0ng Di\u1ec7u, Ward 10, Ph\u00fa Nhu\u1eadn District, HCMc<\/p>\n<p style=\"text-align: justify;\"><strong>Abstract:<\/strong><\/p>\n<p style=\"text-align: justify;\">From 2002 to 2010, China ran large surpluses in both the current and capital accounts of its balance of payments, which the People\u2019s Bank of China (PBOC) purchased and held at official foreign reserves to avoid nominal appreciation of the currency. Concurrently, with its massive purchases of foreign exchange, the PBOC compelled commercial banks to buy PBOC \u201csterilization bonds\u201d and raised commercial bank reserve requirement ratios to avoid monetization of its foreign exchange purchases and concomitant upward pressure on the price level (i.e. real appreciation of the currency). Sterilizing foreign exchange intervention, as China did for a decade, constitutes a violation of the implicit rules of a fixed exchange rate regime and as such can be seen as a mercantilist policy of manipulating the real exchange rate to gain, or avoid losing, international price competitiveness, what Corden (1981) termed as \u201cexchange rate protection.\u201d This paper sets out the simple theory of the costs and benefits of exchange rate protection and provides back-of-theenvelope estimates of their magnitude in China in the 2000s. It also explores the \u201cother side of the story,\u201d the decline in U.S. manufacturing employment in the 2000s, which recent literature attributes to a \u201cChina Trade Shock\u201d that allegedly resulted from the U.S. granting Permanent Normal Trade Relations (PNTR) to China in 2001. Here it is argued that the so-called \u201cChina Trade Shock\u201d resulted from China\u2019s sterilized intervention policy, not the granting of PNTR. The implications of these competing hypotheses are consider in the conclusion of the paper.<\/p>\n<p style=\"text-align: justify;\"><a href=\"http:\/\/se.dotv.vn\/wp-content\/uploads\/2017-03-16-Jame-Riedel.pdf\" target=\"_blank\"><strong>Download paper<\/strong><\/a><\/p>\n<p style=\"text-align: justify;\">\n","protected":false},"excerpt":{"rendered":"Prof.\u00a0James Riedel - Johns Hopkins University 11h00 on Thursday, March 16th, 2017 School of Economics - Dubai Palace H.001 - 1A Ho\u00e0ng Di\u1ec7u, Ward 10, Ph\u00fa Nhu\u1eadn District, HCMc Abstract: From 2002 to 2010, China ran large surpluses in both the current and capital accounts of its balance of payments, which the People\u2019s Bank of China","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[190,186],"tags":[],"acf":[],"lang":"en","translations":{"en":2821,"vi":2780},"pll_sync_post":[],"_links":{"self":[{"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/posts\/2821"}],"collection":[{"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/comments?post=2821"}],"version-history":[{"count":3,"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/posts\/2821\/revisions"}],"predecessor-version":[{"id":2853,"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/posts\/2821\/revisions\/2853"}],"wp:attachment":[{"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/media?parent=2821"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/categories?post=2821"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/se.dotv.vn\/wp-json\/wp\/v2\/tags?post=2821"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}