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Endogenous Discounting, Precautionary Savings and the Current Account: the Case of China

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  • Tianding Zhang

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

The relationship between the current account and the macroeconomic development remains an important issue in an open economy. Recently, global current account imbalances, and more specifically the large deficit in the United States and the surplus in China and other Asian economies, continue to draw considerable attention in both policy makers and academics. The macroeconomic effects induced by China's current account surplus, especially the big trade balance surpluses against the United States, and the related adjustment policy in the rebalance will affect the China's economic growth and development in the future. China's external current account surpluses are not unrelated to problems with its internal imbalances. This paper focuses on the saving channel. In particular, the objective of this paper is to study the relationship between precautionary savings and China's current account surplus.

Suggested Citation

  • Tianding Zhang, 2011. "Endogenous Discounting, Precautionary Savings and the Current Account: the Case of China," CERDI Working papers halshs-00556979, HAL.
    • Handle: RePEc:hal:cdiwps:halshs-00556979
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00556979
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    References listed on IDEAS

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