The Chinese government has been hesitant to revalue the yuan out of concern over the negative impact revaluation would have on the domestic economy. To maintain a stable exchange rate, however, the authorities have had no choice but to tolerate large balance of payment surpluses and a rapid...

We analyze the global imbalances and the required adjustments for rebalancing in current accounts and real exchange rates. We set up a two-country two-sector model for the US-China with two asymmetries. First, we assume that the size of China initially is one third of the US but its size becomes...

China's trade surplus is often heavily criticized in political and economic debates, accompanied by claims for a revaluation of the Chinese currency, the Renminbi (RMB). While the main arguments exchanged in the current discourse appear to become more and more emotionally loaded rather than...