IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

La valeur du yuan. Les paradoxes du taux de change d’équilibre

  • Mestiri, Sana
  • Bouveret, Antoine
  • Sterdyniak, Henri

Using equilibrium exchange rate models (PPP, BEER and FEER), many authors have concluded that the renminbi is undervalued by 15 to 30% against the dollar, but they implicitly assume that the economy is at full-employment, a debatable hypothesis for developing economies such as China, whose unemployed amount to 150 millions people. On the contrary, we consider that China is facing massive unemployment; if investment depends on expected potential demand (from domestic consumption and foreign demand), then an undervalued exchange rate (by traditional standards) is required for its policy objectives. Therefore the exchange rate can be analyzed as a policy tool used by the Chinese authorities to pursue their growth strategy. Equilibrium exchange rate theories are not suited for developing countries. For growth and stability, a managed exchange rate regime seems better that a floating one.

If 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.

File URL: http://basepub.dauphine.fr/xmlui/bitstream/123456789/5512/1/CR%20OFCE%20Mestiri.pdf
Download Restriction: no

Paper provided by Paris Dauphine University in its series Economics Papers from University Paris Dauphine with number 123456789/5512.

as
in new window

Length:
Date of creation: 2006
Date of revision:
Publication status: Published in Revue de l'OFCE, 2006, Vol. 98, no. 3. pp. 77-127.Length: 50 pages
Handle: RePEc:dau:papers:123456789/5512
Contact details of provider: Web page: http://www.dauphine.fr/en/welcome.html

More information through EDIRC

References listed on IDEAS
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.:

as in new window
  1. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
  2. Michael P. Dooley & David Folkerts-Landau & Peter Garber, 2004. "Direct Investment, Rising Real Wages and the Absorption of Excess Labor in the Periphery," NBER Working Papers 10626, National Bureau of Economic Research, Inc.
  3. Se-Eun Jeong & Jacques Mazier, 2003. "Exchange Rate Regimes and Equilibrium Exchange Rates in East Asia," Revue économique, Presses de Sciences-Po, vol. 54(5), pages 1161-1182.
  4. Franco Modigliani & Shi Larry Cao, 2004. "The Chinese Saving Puzzle and the Life-Cycle Hypothesis," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 145-170, March.
  5. Giles, John & Park, Albert & Zhang, Juwei, 2005. "What is China's true unemployment rate?," China Economic Review, Elsevier, vol. 16(2), pages 149-170.
  6. Morris Goldstein & Nicholas R. Lardy, 2005. "China's Role in the Revived Bretton Woods System: A Case of Mistaken Identity," Working Paper Series WP05-2, Peterson Institute for International Economics.
  7. Michael Funke & Jörg Rahn, 2005. "Just How Undervalued is the Chinese Renminbi?," The World Economy, Wiley Blackwell, vol. 28(4), pages 465-489, 04.
  8. Eichengreen, Barry, 2004. "Chinese Currency Controversies," CEPR Discussion Papers 4375, C.E.P.R. Discussion Papers.
  9. Antoine Bouveret & Henri Sterdyniak, 2005. "Les modèles de taux de change. Équilibre de long terme, dynamique et hystérèse," Revue de l'OFCE, Presses de Sciences-Po, vol. 93(2), pages 243-286.
  10. Jeffrey Frankel, 2005. "On the Renminbi: The Choice between Adjustment under a Fixed Exchange Rate and Adjustment under a Flexible Rate," NBER Working Papers 11274, National Bureau of Economic Research, Inc.
  11. Ronald I. Mckinnon, 2005. "China'S New Exchange Rate Policy: Will China Follow Japan Into A Liquidity Trap?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 50(sp), pages 463-474.
  12. Ronald McKinnon, 2005. "Exchange rate or wage changes in international adjustment?," International Economics and Economic Policy, Springer, vol. 2(2), pages 261-274, November.
  13. repec:cai:recosp:reco_545_0001 is not listed on IDEAS
  14. Virginie Coudert & Cécile Couharde, 2005. "Real Equilibrium Exchange Rate in China," Working Papers 2005-01, CEPII research center.
  15. Eswar Prasad & Shang-Jin Wei, 2005. "The Chinese Approach to Capital Inflows: Patterns and Possible Explanations," NBER Working Papers 11306, National Bureau of Economic Research, Inc.
  16. Agnès Bénassy-Quéré & Pascale Duran-Vigneron & Amina Lahrèche-Revil & Mignon, Valerie, 2004. "Burden Sharing and Exchange-Rate Misalignments within the Group of Twenty," Working Papers 2004-13, CEPII research center.
  17. Dominique Desruelle & Alessandro Zanello, 1997. "A Primeron the IMF's Information Notice System," IMF Working Papers 97/71, International Monetary Fund.
  18. Morris Goldstein, 2004. "Adjusting China's Exchange Rate Policies," Working Paper Series WP04-1, Peterson Institute for International Economics.
  19. John Williamson, 1994. "Estimating Equilibrium Exchange Rates," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 17, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:dau:papers:123456789/5512. 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: (Alexandre Faure)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.