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Exchange Rate Policy and Global Supply Chains: The Case of the Chinese Renminbi and Global Soybean and Soybean Product Markets

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  • Gary W. Williams
  • Ji Luo

Abstract

A policy debate on widespread currency manipulation has generated economic analyses to inform policymakers regarding both the extent and impact of the problem. Such analyses typically focus on commodity trade and price impacts while ignoring potentially important supply chain linkages. Using Chinese exchange rate policy and global soybean and soybean product markets as an example, this paper illustrates that substantial measurement errors are possible if supply chain linkages are ignored in exchange rate policy analyses. As a consequence, policy responses to foreign currency manipulation informed by such analyses may be misguided or imprecise at best.

Suggested Citation

  • Gary W. Williams & Ji Luo, 2017. "Exchange Rate Policy and Global Supply Chains: The Case of the Chinese Renminbi and Global Soybean and Soybean Product Markets," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(1), pages 177-198.
  • Handle: RePEc:oup:apecpp:v:39:y:2017:i:1:p:177-198.
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    References listed on IDEAS

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    More about this item

    Keywords

    Supply chain; measurement error; renminbi; exchange rate; soybeans; China;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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