Please wait a minute...
Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front Econ Chin    2010, Vol. 5 Issue (3) : 375-392    https://doi.org/10.1007/s11459-010-0103-3
research-article |
China’s Equilibrium Exchange Rate Dynamics 1994–2004: A Cointegration Analysis
Jingtao Yi()
School of Business, Renmin University of China, Beijing 100872, China
 Download: PDF(608 KB)   HTML
 Export: BibTeX | EndNote | Reference Manager | ProCite | RefWorks
Abstract

Motivated by the global debate on the possible revaluation of the Chinese currency, the RMB, in recent years, the objective of this paper is to measure the equilibrium value of the RMB exchange rate through the macroeconomic balance approach in order to produce an assessment of the RMB in terms of periods of misalignment. The empirical evidence indicates that although there turns out to be an increasing degree of the RMB undervaluation in these measures from 2003 to 2004, the RMB is not substantially undervalued in both measures of real effective exchange rates and nominal bilateral exchange rates against the US dollar over the full period 1994–2004.

Keywords equilibrium exchange rate      foreign exchange      Chinese Renminbi      macroeconomic balance      cointegration     
Corresponding Authors: Jingtao Yi,Email:jingtaoyee@hotmail.com   
Issue Date: 05 September 2010
 Cite this article:   
Jingtao Yi. China’s Equilibrium Exchange Rate Dynamics 1994–2004: A Cointegration Analysis[J]. Front Econ Chin, 2010, 5(3): 375-392.
 URL:  
http://academic.hep.com.cn/fec/EN/10.1007/s11459-010-0103-3
http://academic.hep.com.cn/fec/EN/Y2010/V5/I3/375
[1] Hongjin Xiang, Zheng Zhan, Mingyong Lai. The Trade Destruction Effect and Trade Diversion Effect of RMB Appreciation[J]. Front Econ Chin, 2011, 6(3): 479-493.
[2] Bing Zhang, Xindan Li. Currency Appreciation and Stock Market Performance: Evidence from China[J]. Front Econ Chin, 2010, 5(3): 393-411.
[3] Yizhong Wang , . The Internal and External Equilibrium Exchange Rate of RMB: 1982–2010[J]. Front. Econ. China, 2010, 5(2): 210-231.
[4] Jinwen Zhao, Hui Gao , . Impact of Asset Price Fluctuation on China’s Monetary Policy: An Empirical Analysis Based on Quarterly Data, 1994–2006[J]. Front. Econ. China, 2010, 5(1): 69-95.
[5] QIU Bin, TANG Baoqing, SUN Shaoqin. An empirical study on the long-term correlation between international trade and infl ow of Foreign Direct Investment based on Cointegration Theory: Evidence from China[J]. Front. Econ. China, 2007, 2(4): 607-622.
[6] L? Jian. Empirical study on the infl uence of RMB exchange rate misalignment on China’s export —Based on the perspective of dualistic economic structure[J]. Front. Econ. China, 2007, 2(2): 224-236.
Viewed
Full text


Abstract

Cited

  Shared   
  Discussed