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Czasopismo
2014 | nr 5 | 407--432
Tytuł artykułu

The Quest for Determinants of Chinese Exchange Rate Policy

Warianty tytułu
Języki publikacji
EN
Abstrakty
EN
This paper examines the decision function of the People's Bank of China concerning setting of the renminbi exchange rate against the U.S. dollar. We use an ordinal dependent variable model to check whether main macroeconomic variables and repeated complaints from U.S. institutions and officials about the Chinese exchange rate had an influence on the Chinese exchange rate policy in the period 2000-2011. The results of estimation show that GDP growth, trade balance and pressure from the U.S. on greater exchange rate flexibility had a positive impact on the probability of renminbi exchange rate appreciation. These findings suggest that the primary goal of the exchange rate policy in China is to support the export sector. This goal, however, is compromised by allowing the renminbi to appreciate under pressure from the U.S. Treasury. This suggests that in large open economies the exchange rate policy cannot be pursued regardless of its international ramifications.(original abstract)
Czasopismo
Rocznik
Numer
Strony
407--432
Opis fizyczny
Twórcy
  • Szkoła Główna Handlowa w Warszawie
  • Szkoła Główna Handlowa w Warszawie
  • Credit Agricole Bank Polska
Bibliografia
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  • Fan G. (2008), Renminbi revaluation and US dollar depreciation, w: M. Goldstein, N.R. Lardy (eds.), Debating China's exchange rate policy, Peterson Institute for International Economics, Washington.
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  • Goldstein M., Lardy N. (2006), China's exchange rate policy dilemma, American Economic Review, 96(2), 422-426.
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  • Liu X., Fan C. (2010), The model and empirical estimation of the optimal flexibility of RMB exchange- -rate regime: a study based on the price-stabilization, Frontiers of Economics in China, Springer, 5(2), 187-209.
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  • Maddala G.S. (1994), Limited-dependent and qualitative variables in econometrics, Cambridge University Press, Cambridge.
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  • Rubaszek M. (2004), A model of balance of payments equilibrium exchange rate, Eastern European Economics, 42(3), 5-22.
  • Sato K., Shimizu J., Shrestha N., Zhang Z. (2012), New estimates of the equilibrium exchange rate: the case for the Chinese Renminbi, The World Economy, 35(4), 419-443.
  • Soofi A.S. (2009), China's exchange rate policy and the United States' trade deficits, Journal of Economic Studies, 36(1), 36-65.
  • Spencer K. (2006), Reaction function of Bank of England MPC members: insiders versus outsiders, University of Surrey Discussion Papers in Economics, 06/06.
  • Stokes M.E., Davis C.S., Koch G.G. (2000), Categorical data analysis using the SAS system, SAS Institute, Cary.
  • Tyers R., Bain I., Bu Y. (2008), China's equilibrium real exchange rate: a counterfactual analysis, Pacific Economic Review, 13(1), 17-39.
  • Williamson J. (1994), Estimates of FEER, in: J. Williamson (ed.), Estimating equilibrium exchange rates, Institute for International Economics, Washington.
Typ dokumentu
Bibliografia
Identyfikatory
Identyfikator YADDA
bwmeta1.element.ekon-element-000171298007

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