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The bilateral real exchange rates and trade between China and the U.S

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  • BAAK, SaangJoon
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    Abstract

    This paper examines the impacts of the real exchange rates between the renminbi and the US dollar on the trade between the two countries. Because various tests with the quarterly data from 1986Q1 to 2006Q2 imply a structural break around 1994Q1, the export equations are estimated using the quarterly data from 1995Q1 to 2006Q2. According to the estimation of cointegrating vectors, 1% depreciation of the renminbi raises the Chinese exports to the US by 1.7%, while 1% depreciation of the US dollar raises the US exports to China by around 0.4%.

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    Bibliographic Info

    Article provided by Elsevier in its journal China Economic Review.

    Volume (Year): 19 (2008)
    Issue (Month): 2 (June)
    Pages: 117-127

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    Handle: RePEc:eee:chieco:v:19:y:2008:i:2:p:117-127

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    Web page: http://www.elsevier.com/locate/chieco

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    Cited by:
    1. Du, Yuxin & Teixeira, Aurora A.C., 2012. "A bibliometric account of Chinese economics research through the lens of the China Economic Review," China Economic Review, Elsevier, vol. 23(4), pages 743-762.
    2. Liao, Wei & Shi, Kang & Zhang, Zhiwei, 2012. "Vertical trade and China's export dynamics," China Economic Review, Elsevier, vol. 23(4), pages 763-775.
    3. Bhattarai, Keshab & Mallick, Sushanta, 2013. "Impact of China's currency valuation and labour cost on the US in a trade and exchange rate model," The North American Journal of Economics and Finance, Elsevier, vol. 25(C), pages 40-59.
    4. Hongjin Xiang & Zheng Zhan & Mingyong Lai, 2011. "The trade destruction effect and trade diversion effect of RMB appreciation," Frontiers of Economics in China, Springer, vol. 6(3), pages 479-493, September.
    5. Wang, Chun-Hsuan & Lin, Chun-Hung A. & Yang, Chih-Hai, 2012. "Short-run and long-run effects of exchange rate change on trade balance: Evidence from China and its trading partners," Japan and the World Economy, Elsevier, vol. 24(4), pages 266-273.

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