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The Overvaluation of Renminbi Undervaluation

  • Yin-Wong Cheung
  • Menzie D. Chinn
  • Eiji Fujii

We evaluate whether the Renminbi (RMB) is misaligned, relying upon conventional statistical methods of inference. A framework built around the relationship between relative price and relative output levels is used. We find that, once sampling uncertainty and serial correlation are accounted for, there is little statistical evidence that the RMB is undervalued. The result is robust to various choices of country samples and sample periods, as well as to the inclusion of control variables.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12850.

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Date of creation: Jan 2007
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Publication status: published as 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.
Handle: RePEc:nbr:nberwo:12850
Note: IFM
Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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