Stiglitz has published many articles in magazines, but he has only written two books: one is Lecture on Public Economics, written by McGraw-Hill Book Company, 1980, co-authored with A.B. Atkinson, which is an advanced textbook of finance; The other is The Theory of Commodity Price Stability (Oxford University Press, 198 1) co-authored with D.M.G newbury. In addition, he co-edited a book "Partial Continuation of Modern Economic Growth Theory" with H.Uzawa (MIT Press, 1969).
20 12 published the price of inequality. Why does the United States keep an eye on the US-China trade deficit?
Stiglitz said that in the early days of the economic recession, many people were worried that trade protectionism would rise viciously. The risk of a new round of trade protectionism is closely related to the lack of economic stimulus in the United States. With the rising fiscal deficit in the United States, the second round of economic stimulus plan cannot appear. Due to the limitations of monetary policy itself, it is impossible to curb inflation hawks. It is almost impossible to hope that Congress will help, and trade protectionism can only rise proudly.
In many cases, trade protection directly stems from dissatisfaction with the import and export figures of domestic commodities. According to the statistics of the US Department of Commerce, in 2007, the United States recorded a trade deficit of 711600 million US dollars, and the deficit in 2008 was as high as 695.9 billion US dollars. After the outbreak of the financial crisis, the US trade deficit fell to $380.7 billion in 2009. As the US economic recession affected domestic consumption and imports, the US government adopted policies to control the deficit and promote exports.
"American politicians keep an eye on the trade deficit between the United States and China, but in fact, if we look at the trade between the United States and Saudi Arabia, we will find that the trade deficit between the two countries is even greater. Saudi Arabia's current account surplus with the United States has reached 1 1.5% of its GNP, which is more than twice that of China. If the United States does not export weapons to Saudi Arabia, Saudi Arabia's trade surplus will be far greater than this figure. " Stiglitz said.
In the case of insufficient global economic aggregate demand, the current account surplus is indeed a problem. However, Stiglitz said that China's surplus is smaller than that of Japan and Germany combined, accounting for only 5% of GDP, while the latter accounts for 5.2%.
Labeling China as a "currency manipulator" is harmful to the United States.
This article points out that the RMB exchange rate war between the United States and China will continue. Many Americans accuse China of undervaluing the RMB, which is the chief culprit of the US trade deficit. Although China was not listed as a manipulator in the exchange rate report released by the US Treasury in 20 10, the US Treasury said that China's foreign exchange reserves and huge trade surplus indicated that the RMB exchange rate was undervalued.
Stiglitz said that the concept of "currency manipulation", that is, the government affects the exchange rate through direct or indirect actions, is inherently flawed. "In this case, those unrestrained fiscal deficits and low interest rates will lead to soft money. It was not until the recent Greek crisis that the United States benefited from the low interest rate of the dollar/euro. Then, should Europe also accuse the United States of' manipulating' the exchange rate to harm European interests and expand exports? " Stiglitz asked.
In fact, besides the exchange rate, there are many factors that will affect the trade balance. For example, the key factor is the national savings of the country. For example, he said, "If the national savings of the United States did not increase substantially, the multilateral trade deficit of the United States could not be greatly reduced. Although the economic recession has made people more and more willing to save money, the increased savings can easily be offset by the government's increased fiscal deficit. "
Adjusting the exchange rate can only make the United States change its textile and clothing imports, such as from China to Bengal or Sri Lanka. At the same time, the rising exchange rate is likely to widen the gap between the rich and the poor in China, because poor farmers in China will face greater competition from highly subsidized farms in the United States. This is the most real trade distortion phenomenon in the world economy: thousands of farmers in developing countries have been hurt because the United States has helped the richest farmers in the world.
Stiglitz said: "During the Asian financial crisis from 1997 to 1998, a stable RMB played an important role in the stability of Asia as a whole, and the whole world benefited from it."
When the article 20 10 was published, there was a great controversy about RMB appreciation in China. He believes that the change of exchange rate will really affect the mode of economic growth. At this time, it is in China's own interest to get rid of the high dependence on export-led growth, and it is unwise to launch a trade war confrontation on the exchange rate issue. No one can win the trade war caused by trade imbalance. "Therefore, the United States is likely to ignite a trade war in an uncertain environment of global economic recovery. The United States should be cautious about this, although politicians can pass on the high unemployment rate in China on this grounds. " However, he said that the global crisis began in the United States, so the United States must look inward and find reasons from itself, not only to restore the economy, but also to prevent the crisis from coming again.
Stiglitz believes that to make international trade more balanced and fair, the most important thing is to create a more level playing field and reduce various forms of subsidies from developed countries to their own industries, because this makes it difficult for developing countries to participate in normal competition.