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China's currency, the renminbi (RMB), has taken the world by storm. The RMB is well on its way to becoming a significant international currency, one that is used widely in international trade and finance. This book documents the RMB's impressive rise, with China successfully adopting a unique playbook for promoting its currency. China's growing economic might, expanding international influence, and the rise of its currency are all intricately connected. The book documents how China's government has tied these goals together, enabling faster progress towards each of them. But there are many pitfalls ahead, both for China's economy and its currency. The book shows how the government has so far navigated its way around domestic and international dangers, but enormous risks still lie ahead. The International Monetary Fund has elevated the RMB to the status of an official reserve currency, a currency that foreign central banks use to keep their rainy day funds. If China plays its cards right, with reforms that put its economy and financial markets on the right track, the RMB is going to become an important reserve currency that could rival some of the traditional reserve currencies such as the euro and the Japanese yen. But this book argues that there are limits to the RMB's ascendance-the hype about its inevitable rise to global dominance is overblown. The Chinese leadership's apparent commitment to financial sector and other market-oriented reforms-coupled with unambiguous repudiation of political, legal, and institutional reforms-sets the RMB on a clear course. It will attain the status of a reserve currency over time but has essentially given up its claim of being seen as a safe haven currency, one that investors turn to for safety. The RMB will erode but not seriously challenge the U.S. dollar's dominance in international finance.

Renminbi. --- Foreign exchange --- Finance --- Yuan --- Change --- Finances --- China --- Chine --- Economic policy --- Politique économique --- S10/0320 --- China: Economics, industry and commerce--Money and banking: since 1949 --- 333.450 --- 333.453 --- Theorie van het deviezenverkeer. Theorie van de koopkrachtpariteit. --- Internationale munt. Rekeneenheden. --- Money. Monetary policy --- Politique économique --- Theorie van het deviezenverkeer. Theorie van de koopkrachtpariteit --- Internationale munt. Rekeneenheden

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This paper extends the equilibrium business cycle framework to incorporate ex ante skill heterogeneity among workers. Consistent with the empirical evidence, skilled and unskilled workers in the model face the same degree of cyclical variation in real wages although unskilled workers are subject to substantially higher procyclical variation in employment. Systematic cyclical changes in the average skill level of employed workers are shown to induce bias in aggregate measures of cyclical variation in the labor input, productivity, and the real wage. The introduction of skill heterogeneity improves the model’s ability to match the empirical correlation between total hours and the real wage but the correlation between total hours and labor productivity remains higher than in the data.

Labor --- Macroeconomics --- Production and Operations Management --- Business Fluctuations --- Cycles --- Demand and Supply of Labor: General --- Wage Level and Structure --- Wage Differentials --- Wages, Compensation, and Labor Costs: General --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Labor Economics: General --- Macroeconomics: Production --- Labour --- income economics --- Real wages --- Productivity --- Production --- Economic theory --- Labor economics --- Industrial productivity --- United States

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This paper develops a new empirical framework for analyzing the dynamics of the trade balance in response to different types of macroeconomic shocks. The model provides a synthetic perspective on the conditional correlations between the business cycle and the trade balance that are generated by different shocks and attempts to reconcile these results with unconditional correlations found in the data. The results suggest that, in the post-Bretton Woods period, nominal shocks have been an important determinant of the forecast error variance for fluctuations in the trade balances of the Group of Seven countries.

Exports and Imports --- Foreign Exchange --- Macroeconomics --- Economic Theory --- Empirical Studies of Trade --- Business Fluctuations --- Cycles --- Open Economy Macroeconomics --- Agriculture: Aggregate Supply and Demand Analysis --- Prices --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- International economics --- Currency --- Foreign exchange --- Economic theory & philosophy --- Economic growth --- Trade balance --- Real exchange rates --- Supply shocks --- Exchange rates --- Business cycles --- International trade --- Economic theory --- Balance of trade --- Supply and demand --- United States

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This paper provides new empirical evidence on the relationship between reservation wages of unemployed workers and macroeconomic factors--including the unemployment rate and generosity of the unemployment compensation system--as well as individual-specific determinants, such as human capital proxies and length of unemployment spell. The longitudinal dataset provides an interesting perspective on how reservation wages change over time and how they correlate with accepted wage offers for workers who move from unemployment to employment. The findings shed light on the disincentive effects of the German tax and transfer system for the employment decisions of unemployed workers at different skill levels.

Business & Economics --- Labor & Workers' Economics --- Labor --- Macroeconomics --- Wages, Compensation, and Labor Costs: General --- Unemployment: Models, Duration, Incidence, and Job Search --- Demand and Supply of Labor: General --- Aggregate Factor Income Distribution --- Labour --- income economics --- Wages --- Unemployment --- Unemployment rate --- Labor supply --- Income --- National accounts --- Labor market --- Germany

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Dollar, American --- Dollarization --- Capital movements --- International finance