تنظیمات خارجی و سیاست نرخ ارز هماهنگ در آسیا

In this paper, we estimate structural VAR models with contemporaneous restrictions based on neo-classical and Keynesian theories to investigate whether the cause of current account surpluses for East Asian economies is a “saving glut” or undervalued currencies. Analytical results show that the major determinant of the current account is the real effective exchange rate for all East Asian countries with the exception of China for which the major determinant is domestic GDP. Accordingly, the recently requested revaluation of the Chinese yuan may not be an effective policy for reducing the Chinese current account surplus, and may affect other Asian current accounts. We also investigate whether a Chinese currency revaluation would contribute to the improvement of current account imbalances in East Asia and find that a revaluation would, indeed, improve the current accounts of Japan, Korea, Indonesia, and Thailand. Since the trade structures of major East Asian countries are substitutes with that of China, a Chinese currency revaluation might not lead to a decrease in East Asian current account surpluses. Coordination of currency policy among East Asian countries is, therefore, needed to solve the global current account imbalance.

Over the last decade we have witnessed rising global imbalances that can be characterized by large current account deficits for the U.S. and large current account surpluses for most East Asian countries and oil exporting nations. Perhaps the most influential explanation for the widening U.S. current account deficits is the widening productivity gaps between the United States and the rest of the world (Chakraborty & Dekle, 2008; Engel & Rogers, 2006; Hunt & Rebucci, 2005) while a problem on sustainability of the US current account deficit is pointed out (Mann (2002)). The fact that the deficit with East Asia is the most rapidly growing component of U.S. current account deficits may indicate, however, that Asian current account surpluses are an alternative cause. Indeed, the “global saving glut” explanation expounded by Bernanke (2005) seeks the cause of current account deficits outside the United States. This argument views the excess saving of Asian countries, due to increased saving and collapsed investment in the aftermath of the financial crisis, as the cause of U.S. current account deficits.1Fig. 1 presents evidence that the movements in the U.S. current account deficit have been symmetrical with those in the current account surpluses of Japan and East Asia (in terms of GDP).China has been accused of exchange rate manipulation by the U.S. government and requested both to revalue the Chinese yuan and to shift from a dollar peg system to a more flexible exchange rate regime.2 In July of 2005, the Chinese government carried out a reform of its exchange rate system that included abandoning the rigid dollar peg that had been in place since 1994. The Chinese monetary authority has, however, only been revaluing its U.S. dollar rate by 3–5% per year and is still stabilizing the value of the yuan.3 Over the last few years, the Chinese current account surplus has increased substantially and huge foreign reserves have accumulated. The widening trade deficits between the United States and China since 2001 have led the U.S. government to put even more political pressure on the Chinese government with the aim of reducing the U.S. current account deficit.4 The request to revalue the Chinese currency may, however, be theoretically inconsistent with the “saving glut” argument. This argument relies on neo-classical economics, in which it is not the exchange rate but rather the saving–investment balance that determines current accounts. Therefore, a revaluation of the Chinese yuan and other East Asian currencies would not help to reduce the U.S. current account deficit. In contrast, the request for a revaluation of East Asian currencies relies on Keynesian economics, in which it is not the “saving glut” but currency manipulation or undervalued East Asian currencies that would cause the U.S. current account deficit. This paper has two objectives. The first is to investigate whether the request for a currency revaluation contributes to improvements in the U.S. current account. In doing so, we estimate structural vector autoregressive (VAR) models with contemporaneous restrictions based on neo-classical and Keynesian theories to assess whether the main determinant of the current account for each of the East Asian countries is GDP or the real effective exchange rate. The second objective is to examine whether a revaluation of the Chinese yuan would improve current account imbalances in East Asia5. This link depends on whether the trade structures between China and other East Asian countries are substitutes or complements. If they are substitutes, a revaluation of the Chinese yuan will improve the current accounts of other East Asian countries. In this case other East Asian currencies should also be revalued or allowed to appreciate, in addition to the Chinese yuan, in order to reduce global current account imbalances. On the other hand, if trade structures are complementary, a revaluation of the Chinese yuan will deteriorate the current accounts of other East Asian countries. It seems fair to say that a revaluation of the Chinese yuan alone would be enough to solve global current account imbalances. We analyze the effects of the real effective exchange rate for the Chinese yuan on the current accounts of East Asian countries. The remainder of the paper proceeds as follows. Section 2 explains current account models developed from the neo-classical and Keynesian frameworks. In Section 3, we describe two structural VAR models with contemporaneous restrictions that correspond to the above two theories. We also present the empirical results for impulse response functions and variance decompositions Section 4. In Section 5, both three-variable and five-variable VAR models are used to analyze the effects of a Chinese yuan revaluation on the current accounts of other East Asian countries. In Section 6, we summarize our analytical results and discuss several policy implications that are implied by the results.

This paper uses structural VAR models with contemporaneous restrictions based on the neo-classical and Keynesian theories to analyze the determinants of the current accounts of East Asian countries. In particular, we investigate whether currency revaluation contributes to a reduction in the current account imbalance. The analytical results suggest that China is the only country for which domestic GDP, or aggregate domestic demand, is a major determinant of the current account while it is the exchange rate, rather than domestic GDP or U.S. GDP that contributes to the current accounts of other East Asian countries. The evidence from the neo-classical and Keynesian models shows that Chinese GDP, or aggregate domestic demand, mainly determines the Chinese current account. Therefore, the “saving glut” in China is responsible for the current account surplus of China. On the other hand, a revaluation of the Chinese yuan would probably contribute little to a reduction of the current account surplus of China. In contrast, the current accounts of the other East Asian countries are well explained by the Keynesian model, and it is this model that the request for a revaluation or appreciation of currencies relies on. The “saving glut” argument relies on the neo-classical model. A revaluation or appreciation of currencies should contribute to a reduction in the current account surpluses of the other East Asian countries. In addition, three-variable and five-variable VAR models, which include the real effective exchange rate of the home currency and the Chinese yuan, and the current account in terms of domestic GDP are used to investigate whether a revaluation of the Chinese yuan improves or deteriorates the current accounts or saving–investments balance of other East Asian countries. The analytical results show that a revaluation of the Chinese yuan improves the current accounts of Japan, Korea, Indonesia, and Thailand. In other words, the current accounts of major countries in East Asia, for example, Japan and Korea, and several ASEAN member countries such as Thailand and Indonesia, increase in response to a revaluation of the Chinese yuan. Thus, although the U.S. government has requested that the Chinese government revalue the Chinese yuan, such a revaluation would have little effect on the Chinese current account itself. At the same time, the revaluation would improve the current accounts of other major East Asian countries including Japan, Korea, Indonesia, and Thailand. Thus, a revaluation of the Chinese yuan would not contribute to a reduction in the current account imbalance between the United States and East Asia. In fact, it might actually widen this current account imbalance. The results have several policy implications for the current account imbalances of the Asia-Pacific region. First, if we focus on the current account imbalance of China. The “saving glut” in China is responsible for the current account surplus, but a revaluation of the Chinese yuan would have little effect on the current account. The Chinese government should stimulate aggregate domestic demand, including domestic private consumption and private investment, in order to reduce excess savings in China and, in turn, to reduce the Chinese current account surplus. A fiscal expansion conducted by the Chinese government would be effective for stimulating domestic demand. In addition, raising minimum wage rates in China might stimulate domestic private consumption. Moreover, it has been pointed out that inefficient financial intermediation through domestic financial markets cannot provide a well-functioning conduit for domestic savings to flow to domestic investments. Second, a revaluation of the Chinese yuan alone would lead to improvements in the current accounts of other East Asian countries while having little effect on the Chinese current account. Thus, the revaluation might aggravate the current account imbalance that exists between the United States and East Asia. It is not only the Chinese yuan but also other East Asian currencies that need to be revalued or allowed to appreciate against the U.S. dollar in order to reduce the current account imbalance. Coordinated exchange rate policy among the East Asian countries is necessary to solve the global imbalance. Lastly, the U.S. government should reduce its own fiscal deficits to improve the saving–investment imbalance and, in turn, the current account deficit. Coordinated macroeconomic policy for external adjustments in the Asia-Pacific region, which include not only coordinated exchange rate policy in East Asia but also reduced fiscal deficits for the U.S. government, are needed to solve the global imbalance.