Willenbockel, Dirk (2006): Structural Effects of a Real Exchange Rate Revaluation in China: A CGE Assessment.
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The misalignment of the Chinese currency exposed by the rapid build-up of China’s foreign exchange reserves over the past few years has been the subject of considerable recent debate. Recent econometric studies suggest a Renminbi undervaluation on the order of 10 to 30%. The modest revaluation of July 2005 is widely perceived as insufficient to correct China’s balance-of-payments disequilibrium and has not silenced charges that China is engaging in persistent one-sided currency manipulation. Within China there are widespread concerns regarding the adverse employment effects of a major revaluation on labour-intensive export sectors, yet the likely magnitude of these effects remains a controversial issue. The paper aims to shed light on this question by simulating the structural effects of a real exchange rate revaluation that lowers the current account surplus-GDP by 4 percentage-points using a 17-sector computable general equilibrium model of the Chinese economy.
|Item Type:||MPRA Paper|
|Original Title:||Structural Effects of a Real Exchange Rate Revaluation in China: A CGE Assessment|
|Keywords:||Renminbi undervaluation; real exchange rate misalignment; applied general equilibrium analysis|
|Subjects:||F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General
F - International Economics > F1 - Trade > F17 - Trade Forecasting and Simulation
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C68 - Computable General Equilibrium Models
|Depositing User:||Dirk Willenbockel|
|Date Deposited:||25. Nov 2006|
|Last Modified:||13. Feb 2013 07:28|
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