US-China Rivalry: The Macro Policy Choices

Rodney Tyers, Yixiao Zhou

Research output: Working paperDiscussion paper

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Abstract

Stylized representations of recent US and Chinese tax reforms, tariffs against imports and alternative Chinese monetary targeting are examined using a calibrated global macro model that embodies both trade and financial interdependencies. For both countries, unilateral capital tax relief and bilateral tariffs are shown to be “beggar thy neighbor” in consequence with tariffs most advantageous for the US if revenue finances consumption tax relief. China is nonetheless a net loser when these policies are implemented unilaterally by the US, irrespective of its policy response, though a currency float is shown to cushion the effects on its GDP in the short run.
Original languageEnglish
PublisherUWA Business School
Publication statusPublished - 2019

Publication series

NameEconomics Discussion Papers
No.8
Volume19

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