Tyers, Rod; Zhang, Ying
International pressure to revalue China's currency stems in part from the expectation that rapid economic growth should be associated with an underlying real exchange rate appreciation. This hinges on the Balassa-Samuelson hypothesis, which sees growth as stemming from improvements in traded sector productivity and associated rises in wages and non-traded prices. Yet, despite extraordinary growth after the mid-1990s China's real exchange rate showed no tendency to appreciate until after 2004....[Show more]
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