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

Aizenman, Joshua; Jinjarak, Yothin; Marion, Nancy

Abstract

Since the onset of the global crisis, China and the U.S. current-account imbalances are now less than half their pre-crisis levels. For China, the reduction in its current-account surplus post-crisis suggests a structural change. Panel regressions 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. For China, the reduction in its current-account surplus post-crisis suggests a structural change. The rebalancing of China’s current account has been also associated with a decline in its reserves-to-GDP ratio and greater outward FDI that, in turn, mitigates reserve hoarding.

Citation

Aizenman, J., Jinjarak, Y., & Marion, N. (2014). China’s Growth, Stability, and Use of International Reserves. Open Economies Review, 25(3), 407-428. https://doi.org/10.1007/s11079-014-9308-x

• Journal Article Type: Article
• Publication Date: Jul 1, 2014
• Deposit Date: Jan 13, 2014
• Publicly Available Date: Jan 24, 2025
• Journal: Open Economies Review
• Print ISSN: 0923-7992
• Electronic ISSN: 1573-708X
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 25
• Issue: 3
• Pages: 407-428
• DOI: https://doi.org/10.1007/s11079-014-9308-x