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Working Paper
The great housing boom of China
China's housing prices have been growing nearly twice as fast as national income in the past decade despite (1) a phenomenal rate of return to capital and (2) an alarmingly high vacancy rate. This paper interprets such a prolonged paradoxical housing boom as a rational bubble that emerges naturally from China's large-scale economic transition, featuring an exceptionally high rate of return to capital driven by massive resource reallocation. Because such primarily resource-reallocation-driven high capital returns are not sustainable in the long run, expectations of high future demand for ...
Journal Article
Why aren't the Chinese buying more American goods?
The important point is that both the Chinese trade surplus with the United States and the amassed foreign reserves result from the savings decisions of Chinese consumers.
Journal Article
Oil price shocks and inflation risk
Oil price shocks appear to have only transitory effects on headline inflation and virtually no impact on measures of underlying trend inflation.
Journal Article
Money supply, credit expansion, and housing price inflation
Credit and M2 may be driven simultaneously as part of a broader financial intermediation process; a common underlying factor may be the interest rate
Journal Article
Secured and Unsecured Debt Over the Business Cycle
Unsecured debt better predicts economic activity than secured debt
Journal Article
The great Chinese housing boom
Significant store-of-value demand for housing suggests a bubble that could burst, especially when both the household income growth rate and the savings rate start to decline and capital controls in China start to relax.
Journal Article
Okun’s law: a meaningful guide for monetary policy?
Okun?s law can be a useful guide for monetary policy, but only if the natural rate of unemployment is properly measured.>
Journal Article
Low inflation in a world of securitization
Weak lending may still be the culprit behind low inflation, but monetary aggregates may no longer closely track credit conditions.
Journal Article
Reducing the U.S. deficit by recycling capital inflows
The United States can simply recycle the financial capital inflows from China and re-export them back to China in the form of FDI. In so doing, the United States gains a substantially larger rate of return from FDI than China does from owning U.S. government bonds.
Journal Article
Understanding the Trade Imbalance and Employment Decline in U.S. Manufacturing
Economic analysis suggests that a trade war with China can neither stop the decline in American manufacturing employment nor eliminate the U.S. trade deficit, but it could significantly reduce the welfare of American consumers by making U.S. imports of Chinese goods more expensive. Moreover, it could cause the United States to lose its global leadership in free trade and globalization and facilitate China's rise as a world leader in trade and commerce. A better approach may be for policymakers to design policies that can ensure fair redistribution of the gains from free trade among American ...