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Is the Chinese Renminbi Undervalued?


  • Tatom, John


The Chinese government has come under increasing criticism from both the U.S. government and some critics in U.S. industry for manipulating its currency. This article offers some insight on whether the yuan is correctly valued. Evidence suggests that, regardless of whether a fixed exchange rate or a market-driven exchange rate is used, the yuan is close to a correct value, and efforts to force more appreciation could be deflationary for China.

Suggested Citation

  • Tatom, John, 2007. "Is the Chinese Renminbi Undervalued?," MPRA Paper 17776, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:17776

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    References listed on IDEAS

    1. Alan M. Taylor & Mark P. Taylor, 2004. "The Purchasing Power Parity Debate," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 135-158, Fall.
    2. Froot, Kenneth A. & Rogoff, Kenneth, 1995. "Perspectives on PPP and long-run real exchange rates," Handbook of International Economics,in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 32, pages 1647-1688 Elsevier.
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    Cited by:

    1. Tatom, John, 2007. "Is The U.S. Dollar Set to Plummet in Value?," MPRA Paper 17775, University Library of Munich, Germany.

    More about this item


    exchange rate valuation; fixed exchange rate; real exchange rate;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange


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