The Renminbi Equilibrium Exchange Rate: an Agnostic View

Antoine Bouveret, Sana Mestiri and Henri Sterdyniak ()
Additional contact information
Antoine Bouveret: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po
Sana Mestiri: SDF - Laboratoire Structure et Dynamiques Financières - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres

SciencePo Working papers Main from HAL

Abstract: The alleged undervaluation of the renminbi has been the subject of intensive academic research over the past few years. Using equilibrium exchange rate models many authors have concluded that the renminbi is undervalued by 15 to 30% against the US dollar. Yet China has been experiencing strong economic growth for a decade and does not seem to suffer from the supposed misalignment of its exchange rate, with low inflation rate and current account surpluses. The estimations assume that the economy is at full-employment, a strong hypothesis for China, where unemployment amounts to 150 million people. This article claims that a low exchange rate is suited for the objectives of Chinese economic policy. The exchange rate can be undervalued according to traditional models and in equilibrium compared to the government's policy objectives as shown by a theoretical model.

Keywords: equilibrium exchange rate; developing country exchange rate; China economic strategy; kurs równowagi; kurs walutowy kraju rozwijającego się; chińska strategia gospodarcza (search for similar items in EconPapers)
Date: 2007-08
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01071844v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Bank I Kredyt (Bank and Credit), 2007, 25, pp.25-41

Downloads: (external link)
https://sciencespo.hal.science/hal-01071844v1/document (application/pdf)

Related works:
Working Paper: The Renminbi Equilibrium Exchange Rate: An Agnostic View (2008)
Working Paper: The Renminbi Equilibrium Exchange Rate: An Agnostic View (2008)
Working Paper: The Renminbi Equilibrium Exchange Rate: an Agnostic View (2007)
Working Paper: The renminbi equilibrium exchange rate: an agnostic view (2006)
Working Paper: The Renminbi Equilibrium Exchange Rate: an agnostic view (2006)
Working Paper: The Renminbi Equilibrium Exchange Rate: an agnostic view (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:spmain:hal-01071844

Access Statistics for this paper

More papers in SciencePo Working papers Main from HAL
Bibliographic data for series maintained by Contact - Sciences Po Departement of Economics ().