IDEAS home Printed from https://ideas.repec.org/p/ags/iaae12/125010.html
   My bibliography  Save this paper

The Macroeconomic Impacts Of Chinese Currency Appreciation On China And The Rest Of The World: A Global Computable General Equilibrium Analysis

Author

Listed:
  • Yang, Jun
  • Zhang, Wei
  • Tokgoz, Simla

Abstract

There has been contentious debate surrounding the issue of undervaluation of the Chinese Renminbi, with continuous international political pressure on China to appreciate its currency and the Chinese government resisting significant changes in its policy. A key question underlining the debate is whether a Renminbi appreciation would deliver substantial gains for exports and employment as the United States has argued or a significant slowdown of Chinese economy as feared by the Chinese government, and if so to what extent. This paper analyzes the ex-ante, short-term impacts of the Chinese Renminbi appreciation on the Chinese and world economies using the novel approach of modeling nominal exchange rate adjustment in the Global Trade Analysis Project, a global computable general equilibrium model. Scenario results show that the Chinese economy will be affected negatively, with lower real gross domestic product, lower employment rates, and a decline in the trade surplus. Chinese currency appreciation has a positive impact on the GDP of the major countries and regions, but by a small margin. With a higher Chinese exchange rate, trade balances for other trading partner countries, with the exception of the United States, improve.

Suggested Citation

  • Yang, Jun & Zhang, Wei & Tokgoz, Simla, 2012. "The Macroeconomic Impacts Of Chinese Currency Appreciation On China And The Rest Of The World: A Global Computable General Equilibrium Analysis," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125010, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae12:125010
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/125010
    Download Restriction: no

    References listed on IDEAS

    as
    1. van Tongeren, Frank W. & Huang, Jikun, 2004. "China'S Food Economy In The Early 21st Century; Development Of China'S Food Economy And Its Impact On Global Trade And On The Eu," Report Series 29093, Agricultural Economics Research Institute.
    2. Yinhua Mai & Peter B. Dixon & Maureen Rimmer, 2010. "CHINAGEM: A Monash-Styled Dynamic CGE Model of China," Centre of Policy Studies/IMPACT Centre Working Papers g-201, Victoria University, Centre of Policy Studies/IMPACT Centre.
    3. Dirk Willenbockel, "undated". "Structural Effects of a Real Exchange Rate Revaluation in China: a CGE Assessment," EcoMod2006 272100102, EcoMod.
    4. Cheung, Yin-Wong & Chinn, Menzie D. & Fujii, Eiji, 2007. "The overvaluation of Renminbi undervaluation," Journal of International Money and Finance, Elsevier, vol. 26(5), pages 762-785, September.
    5. Zhang, Jian & Fung, Hung-Gay, 2006. "Winners and losers: Assessing the impact of Chinese Yuan appreciation," Journal of Policy Modeling, Elsevier, vol. 28(9), pages 995-1009, December.
    6. Meijl, Hans van & Tongeren, Frank van, 2004. "International diffusion of gains from biotechnology and the European Union's Common Agricultural Policy," Agricultural Economics, Blackwell, vol. 31(2-3), pages 307-316, December.
    7. Virginie Coudert & C├ęcile Couharde, 2005. "Real Equilibrium Exchange Rate in China," Working Papers 2005-01, CEPII research center.
    8. Marcus Noland & Sherman Robinson & Zhi Wang, 1999. "The Continuing Asian Financial Crisis: Global Adjustment and Trade," Working Paper Series WP99-4, Peterson Institute for International Economics.
    9. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Meng, Sam, 2015. "Modeling the impact of exchange rates using a multicurrency framework," Economic Modelling, Elsevier, vol. 49(C), pages 223-231.

    More about this item

    Keywords

    China; computable general equilibrium model; economic impacts; exchange rate; Renminbi appreciation; Financial Economics; International Relations/Trade;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:125010. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/iaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.