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The School of Humanities and Social Sciences, NTU in partnership with the Centre for Public Economics, CSC cordially invites you to a lecture by the Toh Puan Mahani Idris Daim Chair Professor's Lecture on The Global Credit Crisis and China’s Exchange Rate by Professor Ronald McKinnon, William D. Eberle Professor of International Economics at Stanford University. | ||
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Chairperson: |
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Assoc Prof Chen
Kang |
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Division of
Economics |
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Date: |
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Thursday, 13
August 2009 |
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Time: |
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5.30 PM - 7.00
PM |
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Venue: |
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Auditorium,
Civil Service College |
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Abstract | ||
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The case for stabilizing China’s exchange rate against the dollar is strong. Before 2005 when the yuan/dollar rate was credibly fixed, it helped anchor China’s domestic price level. But gradual RMB appreciation from July 2005 to July 2008 created a “one-way-bet” that disordered China’s financial markets in two respects: (1) No private capital outflows to finance China’s huge trade surplus leading to an undue build-up of official exchange reserves and erosion of monetary control, and (2) A breakdown of the forward exchange market in 2007–08 so that exporters could no longer get trade credit—probably worsening the severe slump in Chinese exports. But after July 2008, the credit crunch induced an unexpected unwinding of the dollar carry trade leading to a sharp appreciation in the dollar’s effective exchange rate. The People’s Bank of China (PBC) then stopped RMB appreciation against the dollar. China’s forward exchange market was restored and monetary control regained. Now the PBC can better support the fiscal stimulus by promoting a parallel expansion of bank credit. | ||
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Bio | ||
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Professor McKinnon is currently the William D. Eberle Professor of International Economics Stanford University. An applied economist, his primary interests are in international economics and economic development-with strong secondary interests in transitional economies and fiscal federalism, he is particularly known for his work on exchange rates. | ||
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His current research focuses more on trade and financial policy in less developed and transitional economies, international finance and currency crises, the world dollar standard, international financial architecture, the economics of market-preserving federalism and Japan's liquidity trap. His books, numerous articles in professional journals, and op-eds in the financial press such as The Economist, The Financial Times, and The Wall Street Journal reflect this range of interests. In recent years, Prof McKinnon has focused his research more on East Asia. In particular, he studies the great currency crisis of 1997-98 (which may not be over) affecting Indonesia, Korea, Malaysia, Philippines, and Thailand as well as the foreign exchange origins of Japan's liquidity trap and more prolonged economic slump. Prof McKinnon's other major area of interest has been the study of international money and finance. He has focused on how the use of national currencies, only some of which have the important property of being convertible, allows international trade to be effectively monetized and multilateral rather bartered and bilateral. Together with Kenichi Ohno, Prof McKinnon wrote Dollar and Yen: Resolving Economic Conflict between the United States and Japan (1997) and his latest book is on The East Asian Exchange Rate Dilemma and the World Dollar Standard. Prof McKinnon is also consultant to central banks and monetary authorities in Asia, Latin America, North America, and Europe, as well as with international agencies such as the IMF, the World Bank, the Asian Development Bank, and U.S. AID. | ||
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| Registration | ||
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Admission is free. To
register, please click https://wis.ntu.edu.sg/pls/webexe/REGISTER_NTU.REGISTER?EVENT_ID=OA09072316391520 | ||