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China's Equilibrium Real Exchange Rate: A Counterfactual Analysis

Tyers, Rod; Bain, Iain; Bu, Yongxiang

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China's 'equilibrium' real effective exchange rate is explored using an adaptation of the Devarajan-Lewis-Robinson three-good general equilibrium model under a variety of assumptions about the balance of trade. The absence of secondary indices of import and export prices necessitates their construction from trade data. Some undervaluation is suggested in the lead-up to and during the financial crisis, due in part to an extraordinary accumulation of foreign reserves following exchange rate...[Show more]

dc.contributor.authorTyers, Rod
dc.contributor.authorBain, Iain
dc.contributor.authorBu, Yongxiang
dc.date.accessioned2015-12-08T22:33:44Z
dc.identifier.issn1361-374X
dc.identifier.urihttp://hdl.handle.net/1885/34796
dc.description.abstractChina's 'equilibrium' real effective exchange rate is explored using an adaptation of the Devarajan-Lewis-Robinson three-good general equilibrium model under a variety of assumptions about the balance of trade. The absence of secondary indices of import and export prices necessitates their construction from trade data. Some undervaluation is suggested in the lead-up to and during the financial crisis, due in part to an extraordinary accumulation of foreign reserves following exchange rate integration in 1994. If, instead, China had run a more typical trade balance prior to the crisis its real effective exchange rate would have been higher by about a tenth.
dc.publisherBlackwell Publishing Ltd
dc.sourcePacific Economic Review
dc.subjectKeywords: balance of trade; export; financial crisis; general equilibrium analysis; import; real exchange rate; three-dimensional modeling; Asia; China; Eurasia; Far East
dc.titleChina's Equilibrium Real Exchange Rate: A Counterfactual Analysis
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume13
dc.date.issued2008
local.identifier.absfor160606 - Government and Politics of Asia and the Pacific
local.identifier.ariespublicationu4133361xPUB117
local.type.statusPublished Version
local.contributor.affiliationTyers, Rod, College of Business and Economics, ANU
local.contributor.affiliationBain, Iain, College of Business and Economics, ANU
local.contributor.affiliationBu, Yongxiang, Peoples Bank of China
local.description.embargo2037-12-31
local.bibliographicCitation.issue1
local.bibliographicCitation.startpage17
local.bibliographicCitation.lastpage39
local.identifier.doi10.1111/j.1468-0106.2007.00387.x
dc.date.updated2015-12-08T09:38:09Z
local.identifier.scopusID2-s2.0-38049172659
CollectionsANU Research Publications

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