A Bridge on Economic Issues between China and the World
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Tariff Passthrough at the Border and at the Store: Evidence from US Trade Policy
Alberto Cavallo, Gita Gopinath, Brent Neiman, Jenny Tang, Sep 02, 2020We study the impact of recent tariffs on US prices at the border and at the store. Our results imply that, so far, the tariffs’ incidence has fallen in large part on US firms.
When History Matters Little: Political Hierarchy and Regional Development in China, AD 1000-2000
Ying Bai, Ruixue Jia, Jan 09, 2019Regime changes in China between AD 1000 and 2000 systematically altered the relative importance of different regions in the political hierarchy of that time. The evolution of Chinese provincial capitals and economic activities during this period throws light on how political factors shape economic geography. Employing a panel dataset...
Pushing on a String: State-Owned Enterprises and Monetary Policy Transmission in China
Peter Tillmann, Hongyi Chen, Apr 18, 2018In China, a large share of enterprises is state-owned and has preferential access to finances. This should affect the way the economy responds to changes in monetary policy. We find that a policy easing is more effective than a policy tightening – which is consistent with the PBC being able to “push on a string”.
The Reference Effect of Government Bonds on Corporate Borrowing Costs
Mark J. Flannery, Claire Yurong Hong, Baolian Wang, May 29, 2019It has been widely argued that government bonds can be used as a reference point for pricing corporate bonds. This “reference” role can reduce the cost of corporate borrowing. The authors study this question by examining a unique experiment in China. China issued two sovereign bonds denominated in U.S. dollars (USD) in October 2017, the first...
Leverage-Induced Fire Sales and Stock Market Crashes
Jiangze Bian, Zhiguo He, Kelly Shue, Hao Zhou, Dec 03, 2018The authors find that margin investors heavily sell their holdings when their account-level leverage edges toward the maximum leverage limits. Stocks that are disproportionately held by accounts close to leverage limits experience high selling pressure and abnormal price declines that subsequently reverse over the next 40 trading days. Unregulated shadow-financed margin accounts contributed more to the market crash even though these shadow accounts had higher leverage limits and held a smaller fraction of market assets.
