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In his new book, Arvind Subramanian presents the following possibilities: What if, contrary to common belief, China's economic dominance is a present-day reality rather than a faraway possibility? What if the renminbi's takeover of the dollar as the world's reserve currency is not decades, but mere years, away? And what if the United States's economic pre-eminence is not, as many economists and policymakers would like to believe, in its own hands, but China's to determine? Subramanian's analysis is based on a new index of economic dominance grounded in a historical perspective. His examination makes use of real-world examples, comparing China's rise with the past hegemonies of Great Britain and the United States. His attempt to quantify and project economic and currency dominance leads him to the conclusion that China's dominance is not only more imminent, but also broader in scope, and much larger in magnitude, than is currently imagined. He explores the profound effect this might have on the United States, as well as on the global financial and trade system. Subramanian concludes with a series of policy proposals for other nations to reconcile China's rise with continued openness in the global economic order, and to insure against China becoming a malign hegemon.

Cover -- Contents -- Preface -- Acknowledgments -- Introduction -- Ch 1. A Brief History of Economic Dominance -- Systemic Manifestations of US Economic Dominance -- Defining Dominance and Power -- Ch 2. Quantification and Validation of Economic Dominance -- Identifying the Potential Attributes of Economic Dominance -- Occam Razorization: Narrowing the List -- Measuring the Three Determinants -- Validating Economic Dominance -- Weighting and Constructing the Index of Economic Dominance -- Results: Economic Dominance in the Past -- Ch 3. Quantifying Currency Dominance -- Definition -- Benefits and Costs to the Country Issuing the Reserve Currency -- Short History -- What Determines Reserve Currency Status? -- Appendix 3A A Regression Analysis of Reserve Currency Status -- Ch 4. Forces Driving Dominance: Convergence and Gravity -- Convergence of the Previously Poor -- Convergence of the Populous, Previously Poor -- Projecting Numbers: Background Analytics -- Results -- Caveat -- Back to History: Economics Catches Up with Demographics -- Conclusion -- Appendix 4A Projecting GDP Growth Based on Purchasing Power Parity and Market Exchange Rates -- Appendix 4B Trade Projections Based on the Gravity Model -- Ch 5. Projecting Economic and Currency Dominance -- Economic Dominance in the Future -- The Future of the Dollar and the Renminbi -- The Renminbi When the Chips Are Down -- Conclusion -- Appendix 5A Robustness of the Index of Economic Dominance -- Ch. 6 A Historical Perspective on China's Distinctive Dominance -- Precocious or Premature: Can a Not-the-Richest China Be Dominant? -- China's Trade and Openness Outcomes in Historical Power Perspective -- Chinese Mercantilism in Historical Perspective -- Ch 7. Guarding Against Rash Prophesying -- China's Growth: Repeating Mistakes? -- Looking Back -- Realism of Trade Projections -- Conclusion.

This paper examines different explanations - initial conditions, openness to trade and FDI, and institutions - of the Mauritian growth experience since the mid-1970s. We show that arguments based on openness to trade and FDI are either misleading or incomplete. Even when correctly articulated, openness appears to be a proximate rather than an underlying explanation for the Mauritian experience. The institution-based explanation offers greater promise. Ultimately, however, the econometric results indicate that existing explanations may be incomplete. Some idiosyncratic factors, particularly Mauritian diversity and the responses to managing it, may provide the missing pieces in the story of Mauritius's success.