We examine whether the Chinese exchange rate is misaligned and how Chinese trade flows respond to the exchange rate and to economic activity. We find, first, that the Chinese currency, the renminbi (RMB), is substantially below the value predicted by estimates based upon a cross-country sample,...

The extraordinary height of the U.S. current account deficits in the 90s gave rise to concern, a variety of papers and political recommendationsrevealing the very contrary opinions of economists on the subject.From this alarming evolution, the question of sustainability of such a...

What explains the US dollar's role in the global economy and the tensions affecting its likely persistence? Most analyses start from Triffin's dilemma, which accurately captured specific but partial tensions of a global monetary system based on essentially fixed exchange rates, gold backing for...

The document describes the evolution of intra-EU current account asymmetries. Some experimental results obtained using a modelling approach to derive asymmetry-free European aggregates are presented. The results are not usable at the national (Member State) level and they will not eliminate...

In 2005 the current account deficit attained 7½% of GDP, its worst position of the last 25 years, and in 2006 it might reach 8½%. Traditionally, Spain’s trade deficit has been partially offset by surpluses in other external balances, particularly service trade, as a result of large net...