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China’s Terms of Trade and Its Relation to the Macroeconomic Fluctuations (2001-2011)
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TitleChina’s Terms of Trade and Its Relation to the Macroeconomic Fluctuations (2001-2011)  
AuthorFeng LU and Li Yuanfang  
OrganizationNational School of Development, Peking University; 
Key WordsChina’s terms of trade; Gross domestic income; Large Open economy; The “boomerang effects” 
AbstractOwing to the large economic size and characteristics of the current development stage, China has experienced a significant worsening in the terms of trade, comparable to nearly 1 percent loss of annual gross domestic product. “Monetary easing—real economy expansion—import volume increase—rise in the international commodity prices—import price increase—worsening terms of trade”, has been revealed by the empirical evidence as the transmission mechanism from China’s macroeconomic fluctuation to the short-term variation in China’s terms of trade. During the specific stage in China’s industrialization and urbanization, the expansion in money and aggregate demand can lead to a negative impact on China’s welfare through transmission effects, which is referred to as the “boomerang effects” in the paper. 
Serial NumberWP299 
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