Non-traded Factor Appreciation in China

Gordon Menzies and Xiaolin Xiao
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Xiaolin Xiao: Economics Discipline Group, University of Technology, Sydney, http://www.uts.edu.au/about/uts-business-school/economics

No 2, Working Paper Series from Economics Discipline Group, UTS Business School, University of Technology, Sydney

Abstract: The departure of a factor in excess supply in the non-traded sector leads to a real appreciation, in a setup that combines the canonical Lewis Model (Lewis, 1954, and Fei and Ranis, 1961, 1964) with a Balassa-Samuelson traded/non-traded dichotomy (Obstfeld and Rogoff, 1996). China is a potential candidate for non-traded factor appreciation, since it has not completed its structural transformation. A transfer of rural labor to urban areas will appreciate the real exchange rate.

Keywords: Non-traded factor appreciation; Lewis Dual-economy; China (search for similar items in EconPapers)
JEL-codes: F21 F31 F41 (search for similar items in EconPapers)
Pages: 16
Date: 2012-09-01
New Economics Papers: this item is included in nep-iue, nep-opm and nep-tra
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