‘Ravished by Oranges’
on December 20, 2007
How can we be informed? Chesterton famously observed that when we read in today’s newspapers that one window-cleaner fell to his death, our general understanding of window-cleaning is distorted; the information that 35,000 window-cleaners actually did not fall to their deaths would have provided a more balanced view of the matter. Modern historiography has become increasingly aware of this Chestertonian notion.
High Growth and Low Consumption in East Asia: How to Improve Welfare While Avoiding Financial Failures
on December 1, 2007
This paper analyzes certain policies that are typical of a number of rapidly growing East Asian countries in which a fixed exchange rate, combined with a surplus labor market, has made domestic assets relatively inexpensive, generating high rates of FDI as well as domestic capital formation. This "investment hunger" can lead to unanticipated declines in the returns to investment, and resulting financial insolvencies. Private consumption remains low and there are concerns that high savings rates cannot be sustained. We construct a dynamic general equilibrium model and apply it to a stylized Asian economy, loosely based upon China. We calibrate a benchmark equilibrium, and carry out various counterfactual simulations to analyze alternative policies, in particular tax cuts and exchange rate revaluations, as instruments in increasing private consumption while avoiding bank failures.
Topics:
Economy
Organization:
International Monetary Fund (IMF)
Wanjiazhai Water Transfer Project: Key Factors and Assesment
on December 1, 2007
China's impressive economic performance since 1978 with a growth rate of GDP of 9.5 percent per year has been mainly in the industrial and commercial sectors and is concentrated in urban areas; as a result, urban water demand has increased by over 500 percent. Available water supplies, however, have met only 20 percent of the increase. The Shanxi Wanjiazhai Yellow River Diversion Project, funded by the World Bank, was expected to relieve periodic municipal water shortages and to reduce dependence on groundwater resources in three of China's industrial areas—Taiyuan, Pingsuo, and Datong—but the report finds outcomes were moderately unsatisfactory, the risk to development outcome was substantial, and the Bank performance was moderately unsatisfactory.
Topics:
Environment
Organization:
World Bank
Africa-China-U.S. Trilateral Dialogue
on December 1, 2007
Over the course of the last thirteen months, delegates from Africa, China, and the United States have met three times in an effort to identify strategies of cooperation among their respective nations with the goal of accelerating economic development in Africa. The Dialogue is a unique initiative because of its trilateral nature. The purpose of this paper is to summarize the discussions that have taken place.
Organization:
Council on Foreign Relations