This paper examines how China's exports are affected by exchange rate shocks from countries that supply intermediate inputs to China. We build a simple small open economy model with intermediate goods trade to show that due to the intra-regional trade in intermediate goods, a devaluation of...

This paper investigates the sources of economic fluctuations in China since its reform that started in 1978. Using the framework of a standard neoclassical open economy model with time-varying frictions (wedge), we study the relative contribution of the efficiency, labor, investment and foreign...