کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
968411 | 931545 | 2007 | 13 صفحه PDF | دانلود رایگان |
![عکس صفحه اول مقاله: Estimating renminbi (RMB) equilibrium exchange rate Estimating renminbi (RMB) equilibrium exchange rate](/preview/png/968411.png)
It is claimed that China's currency market interventions have caused massive trade imbalances in favor of China. Without an accurate estimate of RMB's long-run equilibrium value, however, the validity of this claim can’t be ascertained. This paper aims to place the debate about the degree of RMB's misalignment in a tractable framework by estimating the long run equilibrium real effective exchange rate of the currency. Based on estimation of the behavioral equilibrium exchange rate (BEER) and using Johansen co-integration technique, we conclude that RMB fluctuates around its long-run equilibrium rate within a narrow band. This implies that the currency has not been consistently undervalued. We identify the money supply, the foreign reserve holdings of China's central bank, and a measure of China's productivity as important explanatory variables of renminbi long-run equilibrium value. A discussion of the implications of the empirical findings of this study indicates that China's exchange rate policy may have played an insignificant role in its trade surpluses.
Journal: Journal of Policy Modeling - Volume 29, Issue 3, May–June 2007, Pages 417–429