Spillover Effects of Exchange Rates: A Study of the Renminbi
AbstractThis paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, which we call the "spillover effect". We use recent theory to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. We exploit the variation - afforded by disaggregated trade data - across exporters, importers, product, and time to estimate this spillover effect. We find robust evidence of a statistically and quantitatively significant spillover effect. Our estimates suggest that a 10 percent appreciation of China's real exchange rate boosts on average a developing country's exports of a typical 4-digit HS product category to third markets by about 1.5-2 percent. The magnitude of the spillover effect varies systematically with product characteristics as implied by theory.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 12/88.
Date of creation: 01 Mar 2012
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
Other versions of this item:
- Mattoo, Aaditya & Mishra, Prachi & Subramanian, Arvind, 2012. "Spillover effects of exchange rates : a study of the Renminbi," Policy Research Working Paper Series 5989, The World Bank.
- NEP-ALL-2012-04-23 (All new papers)
- NEP-CNA-2012-04-23 (China)
- NEP-IFN-2012-04-23 (International Finance)
- NEP-INT-2012-04-23 (International Trade)
- NEP-MON-2012-04-23 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gordon H. Hanson & Raymond Robertson, 2010.
"China and the Manufacturing Exports of Other Developing Countries,"
in: China's Growing Role in World Trade, pages 137-159
National Bureau of Economic Research, Inc.
- Gordon H. Hanson & Raymond Robertson, 2008. "China and the Manufacturing Exports of Other Developing Countries," NBER Working Papers 14497, National Bureau of Economic Research, Inc.
- Kristin J. Forbes, 2002.
"How Do Large Depreciations Affect Firm Performance?,"
NBER Working Papers
9095, National Bureau of Economic Research, Inc.
- Kristin J Forbes, 2002. "How Do Large Depreciations Affect Firm Performance?," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 214-238.
- Forbes, Kristin, 2002. "How Do Large Depreciations Affect Firm Performance?," Working papers 4379-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Gita Gopinath & Oleg Itskhoki & Roberto Rigobon, 2007.
"Currency Choice and Exchange Rate Pass-through,"
NBER Working Papers
13432, National Bureau of Economic Research, Inc.
- Christian Broda & David E. Weinstein, 2004.
"Globalization and the Gains from Variety,"
NBER Working Papers
10314, National Bureau of Economic Research, Inc.
- David Weinstein & Christian Broda, 2004. "Globalization and the Gains from Variety," 2004 Meeting Papers 530, Society for Economic Dynamics.
- Christian Broda & David Weinstein, 2004. "Globalization and the gains from variety," Staff Reports 180, Federal Reserve Bank of New York.
- David E. Weinstein & Christian Broda, 2004. "Globalization And The Gains From Variety," Econometric Society 2004 Latin American Meetings 327, Econometric Society.
- David Weinstein & Christian Broda, 2004. "Globalization and the Gains from Variety," Econometric Society 2004 North American Summer Meetings 508, Econometric Society.
- Simon Johnson & Jonathan D Ostry & Arvind Subramanian, 2010. "Prospects for Sustained Growth in Africa: Benchmarking the Constraints," IMF Staff Papers, Palgrave Macmillan, vol. 57(1), pages 119-171, April.
- Daron Acemoglu & Simon Johnson, 2007.
"Disease and Development: The Effect of Life Expectancy on Economic Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 115(6), pages 925-985, December.
- Daron Acemoglu & Simon Johnson, 2006. "Disease and Development: The Effect of Life Expectancy on Economic Growth," NBER Working Papers 12269, National Bureau of Economic Research, Inc.
- Goldstein, Morris & Khan, Mohsin S., 1985. "Income and price effects in foreign trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 20, pages 1041-1105 Elsevier.
- Michael Peneder, . "Intangible Investment and Human Resources. The New WIFO Taxonomy of Manufacturing Industries," WIFO Working Papers 114, WIFO.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.