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The Renminbi and Poor‐country Growth

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Author Info

  • Christopher Garroway
  • Burcu Hacibedel
  • Helmut Reisen
  • Edouard Turkisch

Abstract

Discussions on how best to exit from global imbalances to create a more balanced world economy have ignored the impact on poor countries of proposals to redress these imbalances. This paper aims at filling that gap. It gauges the degree of renminbi (RMB) undervaluation; presents evidence on RMB undervaluation and China’s GDP growth rate; surveys the role of the real effective exchange rate – both its level and its stability over time – for underpinning growth in developing countries, especially in large dual economies such as China and India; finally, the paper presents new evidence on growth linkages between China and poor countries for the last two decades and surveys literature on potential displacement effects of RMB appreciation. The analysis allows broad conclusions to be drawn about the potential developing-country beneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years. Les discussions sur la meilleure façon de sortir des déséquilibres mondiaux afin de créer une économie mondiale plus équilibrée ont ignoré l'impact sur les pays pauvres des propositions visant à corriger ces déséquilibres. Le présent document vise à combler ce manque. Il évalue d’abord le degré de sous-évaluation du renminbi (RMB) ; il décrit ensuite les évolutions simultanées du degré de sous-évaluation du RMB et du taux de croissance du PIB chinois ; puis, il passe en revue le rôle du taux de change effectif réel - à la fois son niveau et sa stabilité au cours du temps – dans la croissance des pays en développement, surtout dans les grandes économies duales comme la Chine et l'Inde ; enfin, le document présente de nouvelles analyses sur les liens, au cours des deux dernières décennies, entre la croissance chinoise et celle des pays pauvres et passe en revue la littérature traitant des effets potentiels de l'appréciation du RMB sur la croissance. L'analyse permet d’identifier parmi les pays en développement, le

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1111/j.1467-9701.2011.01408.x
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Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 35 (2012)
Issue (Month): 3 (03)
Pages: 273-294

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Handle: RePEc:bla:worlde:v:35:y:2012:i:3:p:273-294

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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. PBoC sets the RMB free and it ... falls
    by Shifting Wealth in ShiftingWealth on 2012-04-16 09:14:00
  2. MGG Public Lecture (30 July 2012, at GDI/DIE)
    by Shifting Wealth in ShiftingWealth on 2012-07-29 12:43:00
  3. Toward Shifting Wealth Phase II
    by Shifting Wealth in ShiftingWealth on 2012-08-10 14:06:00
  4. Global Rebalancing: A Modest Role for the RMB
    by Shifting Wealth in ShiftingWealth on 2011-05-18 12:42:00
  5. The world now grows in Fosbury style
    by Shifting Wealth in ShiftingWealth on 2011-04-05 09:59:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Kappler, Marcus & Reisen, Helmut & Schularick, Moritz & Turkisch, Edouard, 2011. "The macroeconomic effects of large exchange rate appreciations," ZEW Discussion Papers 11-016, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Jinzhao Chen, 2012. "Real Exchange Rate and Economic Growth: Evidence from Chinese Provincial Data (1992 - 2008)," Working Papers halshs-00667467, HAL.
  3. Zhang, Zhibai, 2012. "A simple model and its application in currency valuation," MPRA Paper 40650, University Library of Munich, Germany.
  4. Jinzhao Chen, 2012. "Real Exchange Rate and Economic Growth: Evidence from Chinese Provincial Data (1992 - 2008)," PSE Working Papers halshs-00667467, HAL.
  5. Zhibai, Zhang, 2012. "A Simple Model and Its Application in the Valuation of Five Asian Real Exchange Rates," MPRA Paper 40953, University Library of Munich, Germany.

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