Is the renminbi undervalued?
AbstractA debate has raged whether and to what extent the renminbi has been undervalued. To answer this question this memorandum is first interested in the level of Chinaâ€™s â€œequilibriumâ€ (real effective) exchange rate. Secondly, this memorandum is interested in the methodology to determine the equilibrium exchange rate. A survey of the literature concludes toward a renminbi undervaluation of about 25% in real effective terms. This undervaluation is not expected to disappear any time soon.
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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memorandum with number 166.
Date of creation: Oct 2006
Date of revision:
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-04 (All new papers)
- NEP-CBA-2006-11-04 (Central Banking)
- NEP-CNA-2006-11-04 (China)
- NEP-DEV-2006-11-04 (Development)
- NEP-TRA-2006-11-04 (Transition Economics)
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