Options for China in a Dollar Standard World: A Sovereign Currency Approach

L. Randall Wray and Xinhua Liu

Economics Working Paper Archive from Levy Economics Institute

Abstract: This paper examines the fiscal and monetary policy options available to China as a sovereign currency-issuing nation operating in a dollar standard world. We first summarize a number of issues facing China, including the possibility of slower growth, global imbalances, and a number of domestic imbalances. We then analyze current monetary and fiscal policy formation and examine some policy recommendations that have been advanced to deal with current areas of concern. We next outline the sovereign currency approach and use it to analyze those concerns. We conclude with policy recommendations consistent with the policy space open to China.

Keywords: China; Policy Space; Fiscal and Monetary Policy; Sectoral Balances Approach; Minsky; Sovereign Currency; Modern Money Theory; Middle-Income Trap; Financial Instability (search for similar items in EconPapers)
JEL-codes: E2 E5 E6 F4 G2 G3 H5 H6 H63 H7 H72 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-mac, nep-mon, nep-pke and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:lev:wrkpap:wp_783

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