China’s Impact on Global Financial Markets

Abstract

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Undisclosed Debt Sustainability

“…In addition, it aims to understand the role of China's capital exports in the world economy. Recent work has begun to document China's role in world financial markets (Horn et al, 2019;Agarwal, Gu, and Prasad, 2019) and monetary systems (Farhi and Maggiori, 2019;Ilzetzki, Reinhart and Rogoff, 2019. Section 2 describes the model and the equilibrium concept. Section 3 reports the parameter calibration.…”

Optimal capital account liberalization in China

“…1 These de jure capital account restrictions, however, do not fully capture China's de facto capital account regime. For example, Agarwal et al (2019) show that the errors and omissions (E&O) in China's balance of payments account display a specific pattern suggesting that the intensity of government enforcement of capital account restrictions and private agents' efforts to circumvent such restrictions have resulted in a de facto capital account regime different from the de jure quantity-based capital flow restrictions. 2 In recent years, the Chinese government has signaled its intention to liberalize the capital account, although the pace of liberalization remains uncertain.…”

Optimal Capital Account Liberalization in China

“…1 These de jure capital account restrictions, however, do not fully capture China's de facto capital account regime. For example, Agarwal et al (2019) show that the errors and omissions (E&O) in China's balance of payments account display a specific pattern suggesting that the intensity of government enforcement of capital account restrictions and private agents' efforts to circumvent such restrictions have resulted in a de facto capital account regime different from the de jure quantity-based capital flow restrictions. 2…”