The global crisis has revived the growth-rebalancing debate, backing the position of those advocating a fast reduction of the imbalances between the US and China. By means of a two-country two-stage growth model reproducing the main qualitative features of the Sino-American co-dependency, we...

We develop a two-country two-period model able to reproduce the key qualitative aspects of the US-China co-dependency (and imbalances) as the result of the Chinese and American authorities pursuing different but complementary objectives. We show that a mercantilist reserve hoarding has served...

We present a two-country two-stage growth model capturing several salient features of the special US–China relationship and reproducing the process of export-led growth and structural change in China. In phase 1, China accumulates and sterilizes US assets (and finances US consumption) as it...