Author Archives: Katherine Guo

The People’s Republic of China and the United States have experienced sharp disagreements in economic policies for some time, straining Sino-American relations. Among all, it is the pertinaciously undervalued Renminbi(i) that has drawn much criticism from the developed world. Due to this condition, it is generally believed that China’s economic policy is the main cause of global imbalances in current account positions and that its policy poses a great threat to global economic stability.

In response to the Great Crisis of 2008(ii), a “global saving glut”(iii) theory, postulated by Federal Reserve Chairman Ben Bernanke in 2005, emerged as the prominent narrative to explain the major causes of the crisis. The theory maintains that excessively high savings by some countries pushed their savings towards current account surpluses and away from Continue reading →