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Renminbi misaligned - Results from meta-regressions

  • Korhonen, Iikka

    ()

    (BOFIT)

  • Ritola, Maria

    (BOFIT)

We collect data from 29 separate papers estimating the equilibrium level and possible undervaluation of the Chinese currency, the renminbi. These papers yield a total of 97 individual observations on misalignment, which we analyse with the help of meta-analysis. We find that the vast majority of observations point to renminbi undervaluation in recent years and that the undervaluation is more pronounced when the US dollar exchange rate is used instead of the real effective exchange rate. We find several characteristics of papers and authors that clearly seem to influence the reported misalignments. For example, when the author is affiliated with an investment bank, the reported misalignment is smaller. Using time-series techniques also results in lower estimates of undervaluation. On the other hand, refereed journals seemingly are inclined to publish papers that report larger misalignments. Results caution against trusting too much in any one study concerning renminbi undervaluation.

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File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/DP1309.pdf
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Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 13/2009.

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Length: 27 pages
Date of creation: 10 Sep 2009
Date of revision:
Handle: RePEc:hhs:bofitp:2009_013
Contact details of provider: Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
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Web page: http://www.suomenpankki.fi/bofit_en/
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  1. Yin-Wong Cheung & Menzie D. Chinn & Eiji Fujii, 2009. "China's Current Account and Exchange Rate," CESifo Working Paper Series 2587, CESifo Group Munich.
  2. Égert, Balázs & Halpern, László, 2005. "Equilibrium Exchange Rates in Central and Eastern Europe: A Meta-Regression Analysis," CEPR Discussion Papers 4869, C.E.P.R. Discussion Papers.
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  8. Hinkle, Lawrence E. & Monteil, Peter J. (ed.), 1999. "Exchange Rate Misalignment: Concepts and Measurement for Developing Countries," OUP Catalogue, Oxford University Press, number 9780195211269, March.
  9. Horvath, Roman & Komarek, Lubos, 2006. "Equilibrium Exchange Rates in EU New Members: Applicable for Setting the ERM II Central Parity?," MPRA Paper 1180, University Library of Munich, Germany.
  10. T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
  11. Markus Knell & Helmut Stix, 2005. "The Income Elasticity of Money Demand: A Meta-Analysis of Empirical Results ," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 513-533, 07.
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  13. Bineau, Yannick, 2010. "Renminbi's misalignment: A meta-analysis," Economic Systems, Elsevier, vol. 34(3), pages 259-269, September.
  14. Rod Tyers & Yongxiang Bu & Ian Bain, 2006. "China’s Equilibrium Real Exchange Rate: A Counterfactual Analysis," ANU Working Papers in Economics and Econometrics 2006-466, Australian National University, College of Business and Economics, School of Economics.
  15. Chou, W. L. & Shih, Y. C., 1998. "The Equilibrium Exchange Rate of the Chinese Renminbi," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 165-174, March.
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