Essays on currency intervention, with particular reference to Chinese economy

While many economists suggest that a central bank should make positive profits from currency intervention to maintain price stability, profits and losses from currency intervention by the China\u27s central bank have not received any attention in the literature. My dissertation will use three chapters to fill in this gap. Chapter 1 investigates the optimal currency intervention policy for a profitability targeting central bank using a two-period framework. It is shown that when foreign interest rate is zero, the optimal policy is nonintervention. If the interest rate is positive, a country may earn positive profits by incurring a trade surplus in the first period. However, there is an upper bound for the currency depreciation rate. A country will lose money under excessive devaluation. Chapter 2 further computes the specific annual and cumulative accounting profits and losses from 1994 when China began its currency intervention. It is shown that China\u27s central bank initially made positive profits but since 2007 has lost a massive amount from the foreign exchange market. Chapter 3 investigates the optimal currency intervention policy for a welfare targeting government using a two period framework. It is shown that if marginal utility of income is decreasing in the exchange rate, then the optimal exchange rate are the equilibrium exchange rates that yields trade balance each period

Economic Development under Persistent Currency Intervention

During the recent two decades, the spectacular economic growth of China has been under increasing scrutiny in the literature. However, prevailing discourses have either evaluated the causes/effects of the RMB exchange rate misalignment or theorized the investment/speculation channels. The implication of this persistent currency intervention (CI) regime on economic development, in comparison, remains one of the most contentious subjects in international economics. To shed light on this issue, this research develops a new macroeconomic model to address the two core attributes of China's persistent CI: the stagnant adjustment of the capital markets and the fast liberalization of the commodity markets. It investigates the impacts of macroeconomic controls on output growth and price levels from multiple aspects. It also makes several interesting discoveries in opposition to key postulations of existing macroeconomic models

Bounded weak and strong time periodic solutions to a three-dimensional chemotaxis-Stokes model with porous medium diffusion

In this paper, we study the time periodic problem to a three-dimensional chemotaxis-Stokes model with porous medium diffusion $\Delta n^m$ and inhomogeneous mixed boundary conditions. By using a double-level approximation method and some iterative techniques, we obtain the existence and time-space uniform boundedness of weak time periodic solutions for any $m>1$. Moreover, we improve the regularity for $m\le\frac{4}{3}$ and show that the obtained periodic solutions are in fact strong periodic solutions

China’s Profits and Losses from Currency Intervention, 1994-2011

China\u27s currency policy has been criticized for its apparent pursuit of mercantile advantage by artificially stimulating exports, with potential adverse effects on other economies. While China\u27s currency policy may have positive output effects, there may be additional profits or losses. This paper computes the annual and cumulative accounting profits from currency intervention since 1994 when China began its currency intervention. It is shown that profits initially were positive but since 2007 China has lost a massive amount from the currency market

Understanding Producers’ Perspectives on Rotational Grazing Benefits Across US Great Plains

Experimental findings on rotational grazing (RG) trials have generally differed from producer observations of RG outcomes on commercial scale ranches. Factors such as small plot size, short duration trials and relatively rigid grazing management that lacks responsiveness to the dynamic and complex social-ecological systems in grazing trials could all contribute to this disparity in outcomes. These differences call for a better understanding of producer perceptions of RG benefits. To fill this knowledge gap, we surveyed 4500 producers from the Northern and Southern Great Plains of the USA. Among the 875 respondents, 40.5% reported that they used continuous grazing (CG), 52.7% implemented RG management in an extensive manner, while 6.8% adopted management intensive grazing. Compared with CG users, adopters of RG in its extensive and intensive form reported an average annual increase of grazing season by 7.6 and 39.3 days, respectively. When controlling for producer demographics, ranch management goals and other rancher characteristics, we found soil and climate heterogeneity significantly affected the perceived relative benefits of RG vs CG strategies. Therefore, instead of focusing on whether RG outperforms CG per se, future research could focus on comparison of RG benefits under different management intensity levels and identifying soil and climate conditions where RG benefits are more noticeable

Farmers’ Adoption and Perceived Benefits of Diversified Crop Rotations in the Margins of U.S. Corn Belt

Monoculture and simplified two-crop rotation systems compromise the ecosystem services essential to crop production, diminish agricultural productivity, and cause detrimental effects on the environment. In contrast to the simplified two-crop rotation, diversified crop rotation (DCR) refers to rotation systems that contain three or more crops. Despite multiple benefits generated by DCR, its usage has dwindled over the past several decades. This paper examined determinants of farmers\u27 adoption decisions and perceived benefits of DCR in the west margins of the U.S. Corn Belt where crop diversity has declined. We analyzed 708 farmer responses from a farmer survey conducted in the eastern South Dakota in 2018, accounting for county-level climate variables, as well as cropland data, soil and topographic variables in close proximity of the farm. Our findings indicated that farmers were more likely to utilize DCR as an adaptive strategy to cope with water deficit and reduce soil erosion on marginal land. Additionally, livestock integration and organic farming helped necessitate DCR adoption and magnify its benefits. Producer concerns towards lack of equipment and new crop profitability diluted producers’ interests in DCR practice and compromised its benefits. Enhanced technical and policy support, along with infrastructure and market development, could help producers fully utilize DCR benefits and expand DCR usage to more regions