Agriculture Reference
In-Depth Information
Table A9.9
Smulated short-run effects of a unlateral lberalsaton of Chna's 2001 trade polcy regme:
by iscal policy
Change in:
Tight capital controls, monetary policy
No capital controls, monetary policy
targets the nominal exchange rate,
E
targets the nominal exchange rate,
E
Fiscal Policy 1:
Fiscal Policy 2:
Fiscal Policy 1:
Fiscal Policy 2:
increase deicit
a
tax mx swtch
b
increase deicit
a
tax mx swtch
b
Nominal exchange rate (US$/•),
E
i
0.00
0.00
0.00
0.00
Domestic CPI,
P
C
-1.74
-1.93
-0.79
-1.36
Domestic GDP delator,
P
Y
-2.15
-2.27
-1.03
-1.59
Nominal Money supply,
M
S
-2.54
-2.51
-0.83
-1.45
Import price index
-0.10
-0.10
0.06
0.00
Price of capital goods,
P
K
-1.80
-1.74
-0.89
-1.18
Terms of trade
-1.41
-1.46
-0.85
-1.12
Balance of trade,
X-M = - KA = -(I-S
D
)
, US$ bn
0.00
0.00
-9.5
-5.90
Real effective exchange rate,
e
i
R
-2.30
-2.42
-1.19
-1.75
Real exchange rate against USA,
e
ij
R
-2.17
-2.28
-1.03
-1.59
Global interest rate,
r
w
-0.04
-0.04
0.08
0.03
Investment premium factor,
(1+π)
3.58
2.33
0.00
0.00
Home interest rate,
r
3.55
2.28
0.08
0.03
Expected long-run return on capital,
r
e
1.30
1.24
1.30
1.24
Current return on installed capital,
r
c
0.82
0.67
1.99
1.38
Real domestic investment,
I
-1.76
-0.82
0.98
0.97
Nominal domestic investment
-4.24
-2.89
0.47
0.18
Real consumption,
C
-1.71
-2.43
0.12
-1.37
Real private savings,
S
P
-0.21
-2.23
1.52
-1.37
Gov't spendng as per cent of GDP (real)
0.00
0.00
0.00
0.00
Power of income tax,
1+τ
0.00
1.13
0.00
1.23
Fiscal deicit, per cent change
16.01
0.00
18.61
0.00
Fiscal deicit, change in US$ bn
12.10
0.00
14.00
0.00
Real gross sectoral output
