Reconstructing the Savings Glut: The Global Implications of Asian Excess Saving

Arora, Vipin; Tyers, Rodney; Zhang, Ying

doi:10.5539/ijef.v7n7p19

Cited by 18 publications

(3 citation statements)

References 28 publications

(33 reference statements)

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“…(), Ito () and Tyers (). Global real interest rates peaked in the mid‐1980s and have fallen since, in part because of this relative increase in global savings supply, although more recently because of unconventional monetary policy (UMP), principally in the United States and Japan (He and McCauley, ; Arora et al., ).…”

Section: Introductionmentioning

confidence: 99%

China and Global Macroeconomic Interdependence

Tyers

2016

World Economy

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China is transitioning towards more inward‐focussed growth, causing adverse changes in the product and financial terms of trade in the advanced economies. At the same time, international financial markets tussle between tightening forces associated with the US recovery on the one hand and unconventional monetary expansion in Europe and Japan on the other. The way these shocks interact is examined in this paper using a global macromodel with national portfolio rebalancing and asset differentiation and a representation of unconventional monetary policy. Results are found to be sensitive to the contributions of productivity and capital accumulation to China's growth. When these are offered in realistic combination, the effects are deflationary in the United States and China, militating against contractionary US monetary policy. Monetary responses in the United States and China then combine with price targeting regimes in the EU and Japan to expand liquidity globally, amplifying impacts on financial markets and the global distribution of real investment.

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Section: Introductionmentioning

confidence: 99%

China and Global Macroeconomic Interdependence

Tyers

2016

World Economy

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“…A high degree of long bond market integration, at least across advanced economies, is established by Arora et al (2014).…”

Section: Notesmentioning

confidence: 99%

Pessimism Shocks in a Model of Global Macroeconomic Interdependence

Tyers¹

2014

IJEF

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Insights into the four-region strategic behaviour that drives global economic performance can be derived from applications of the elemental multi-region, macroeconomic simulation model introduced in this paper. It has a global general equilibrium structure that embodies bilateral linkages between represented regions via both trade and investment. It is applied to strategic monetary policy during the post-GFC period, which has been characterised in the US, the EU and Japan by increased aversion to downside risk, the stochastic equivalent of pessimism over prices, disposable income levels and capital returns. The retention of full employment in the pessimistic regions is shown to require very considerable monetary expansions and these tend to flood the other regions with liquidity, temporarily raising their terms of trade, real consumption and investment while appreciating their real exchange rates. The results further suggest elements of a coordination game structure amongst the big four economies in which equilibria are characterised by collective monetary responses and deviations are punished via reduced output and employment.

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“…See, for example,Tyers and Zhang (2011).5 SeeTyers and Zhang (2014).6 For estimates of yield and deflationary pressures associated with 2China's growth surge, seeAurora et al (2015), Tyers (2015, and Tyers (2016).7 See the now extensive literature from Athukorala (2011) andKoopman et al (2014).…”

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confidence: 99%

US–China rivalry: The macro policy choices

Tyers

Zhou

2020

World Economy

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Stylised representations of recent US and Chinese tax reforms, tariffs against imports and alternative Chinese monetary targeting are examined using a calibrated global macro model that embodies both trade and financial interdependencies. For both countries, unilateral capital tax relief and bilateral tariffs are shown to be ‘beggar thy neighbor’ policies. As large economies, both enjoy ‘optimal tariffs’, even bilaterally, though net outcomes are shown to depend on the allocation of revenues. Bilateral tariffs are most advantageous for the US if the additional revenue finances indirect tax relief. Once US bilateral tariffs are imposed, China is a net loser irrespective of its policy response, though a currency float is shown to cushion the effects on its GDP in the short run. Equilibria in normal form non‐cooperative tariff games have the US imposing tariffs while China liberalises.

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Reconstructing the Savings Glut: The Global Implications of Asian Excess Saving

Cited by 18 publications

References 28 publications

China and Global Macroeconomic Interdependence

China and Global Macroeconomic Interdependence

Pessimism Shocks in a Model of Global Macroeconomic Interdependence

US–China rivalry: The macro policy choices

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