Is the Chinese Currency Substantially Misaligned to Warrant Further Appreciation?

Duo Qin and Xinhua He
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Xinhua He: Chinese Academy of Social Sciences

No 660, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: This study provides quarterly time-series estimates of the misalignment in the REER of the Renminbi (RMB). The estimation is based on a commonly used economic approach, but with a wider and more up-to-date coverage of data and a more extensive use of econometric modelling techniques. Our estimates corroborate and explain most of the previous estimates. More importantly, our estimates demonstrate that there is no significant undervaluation in the REER of the RMB though downward misalignment exists in the trilateral rates between the RMB, US$ and euro. The finding refutes the claim that RMB appreciation is the primary and necessary solution to the current global trade imbalance.

Keywords: Real exchange; rate misalignment (search for similar items in EconPapers)
JEL-codes: F31 F41 (search for similar items in EconPapers)
Date: 2010-02-01
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Citations: View citations in EconPapers (6)

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Journal Article: Is the Chinese Currency Substantially Misaligned to Warrant Further Appreciation? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:660

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