The Real Exchange Rate and the Structural Transformation(s) of China and the U.S
From 1989 to 2010, the RMB-dollar real exchange rate depreciated, despite China's rapid income growth relative to the US. We develop a macroeconomic-trade model of the very long-run equilibrium RMB-dollar real exchange rate. We show that this long-run depreciation of the RMB-dollar real exchang...
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Published in | International economic journal Vol. 27; no. 2; pp. 303 - 319 |
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Main Authors | , |
Format | Journal Article |
Language | English |
Published |
Abingdon
Routledge
01.06.2013
Taylor & Francis Ltd 한국국제경제학회 |
Subjects | |
Online Access | Get full text |
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Summary: | From 1989 to 2010, the RMB-dollar real exchange rate depreciated, despite China's rapid income growth relative to the US. We develop a macroeconomic-trade model of the very long-run equilibrium RMB-dollar real exchange rate. We show that this long-run depreciation of the RMB-dollar real exchange rate can be justified by our model, if we note that Chinese agriculture has relatively low productivity and that agriculture is tradeable. Relative to our equilibrium benchmark, the current real RMB-dollar rate is, if anything, over appreciated. |
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Bibliography: | G704-000034.2013.27.2.004 |
ISSN: | 1016-8737 1743-517X |
DOI: | 10.1080/10168737.2013.799900 |