The Overvaluation of Renminbi Undervaluation

Yin-Wong Cheung, Menzie Chinn and Eiji Fujii

No 1918, CESifo Working Paper Series from CESifo

Abstract: We evaluate whether the Renminbi (RMB) is misaligned, relying upon conventional statistical methods of inference. A framework built around the relationship between relative price and relative output levels is used. We find that, once sampling uncertainty and serial correlation are accounted for, there is little statistical evidence that the RMB is undervalued. The result is robust to various choices of country samples and sample periods, as well as to the inclusion of control variables.

Keywords: absolute purchasing power parity; exchange rates; real income; capital controls; currency misalignment (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (155)

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Related works:
Journal Article: The overvaluation of Renminbi undervaluation (2007)
Working Paper: The Overvaluation of Renminbi Undervaluation (2007)
Working Paper: The Overvaluation of Renminbi Undervaluation (2007)
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