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The impacts of China’s exchange rate regime reform in 2005: A counterfactual analysis

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  • Zaichao Du
  • Jie Li
  • Pei Pei

Abstract

This paper empirically evaluates the impacts of China’s exchange rate regime reform in 2005 on its macroeconomy. We propose to use a new counterfactual policy evaluation method that is robust to the choice of control group. Using the new method, we find that China’s exchange rate regime reform in 2005 mildly reduces the Consumer Price Index, has a substantial damping effect on export, significantly increases employment, and has negligible impact on industrial production.

Suggested Citation

  • Zaichao Du & Jie Li & Pei Pei, 2021. "The impacts of China’s exchange rate regime reform in 2005: A counterfactual analysis," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 430-448, February.
    • Handle: RePEc:bla:rdevec:v:25:y:2021:i:1:p:430-448
    DOI: 10.1111/rode.12718
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