Real exchange rate misalignment in China : an empirical investigation.

By Zhichao Zhang. 2001

142 citations recorded by the source corpus.

Based on the theory of equilibrium real exchange rate, this paper estimates the behavioral equilibrium exchange rate and the resulting misalignment in China. Evidence shows chronic overvaluation in China's central planning period, but economic reforms have brought the real exchange rate closer to equilibrium. The cumulative effect of exchange rate reform led to a substantial real depreciation of the Chinese currency after 1981. Indications are that China now has a proactive exchange rate policy with the nominal exchange rate used as a policy tool to attain real targets.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/eff370db0c538362051416518c67bcacd99a62a7

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In Economics and Econometrics

1. Y. Huang
2. Fengjuan Guo
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4. H. Mobolaji

Citations in the corpus

• The role of oil price shocks on China's real exchange rate (2007, result): “In contrast to a large body of literature on valuation of the RMB relative to its equilibrium (e.g., Huang & Wang, 2004; Zhang, 2001; Zhang & Pan, 2004), no empirical work has yet been conducted explicitly so far to disentangle the role of oil price shocks from other underlying determinants driving…”
• Just How Undervalued is the Chinese Renminbi (2005, unknown): “Zhang (2001a) . Chou and Shih investigate movements of the purchasing power parity exchange rate.”