Friday, 10 August 2007

Research paper: "Assessing China's Exchange Rate Regime"

China's exchange rate is seldom out of the news and is a cornerstone of China-US relations. The US want a revaluation to help the record trade deficit between the two countries whilst China is keen to maintain the current rate (subject too a little upward movement every now and then to appease the Americans).

A new NBER paper by Frankel and Wei assess China's exchange rate regime.

Ponder this for a moment. Does a trade inbalance between any two countries really matter in the globalised world? Assume the World consists of 3 countries. China, US and the EU. Now, if the US has a deficit with China of 100 but the EU has a deficit with the US of 100 and also China has a deficit with the EU of 100 then world trade is balanced. The US-China deficit is largely IRRELEVANT. So why all the fuss?

"Assessing China's Exchange Rate Regime"
NBER Working Paper No. W13100

Contact: JEFFREY A. FRANKEL
Harvard University - John F. Kennedy School of
Government, National Bureau of Economic Research
(NBER)
Email: jeffrey_frankel@harvard.edu
Auth-Page: http://ssrn.com/author=20568

Co-Author: SHANG-JIN WEI
International Monetary Fund (IMF) - Research
Department, Centre for Economic Policy Research
(CEPR), National Bureau of Economic Research
(NBER), The Brookings Institution
Email: SWEI@IMF.ORG
Auth-Page: http://ssrn.com/author=54129

Full Text: http://ssrn.com/abstract=986950

ABSTRACT: This paper examines two related issues: (a) the implicit methodology used by the US Treasury in determining whether China and America's other trading partners manipulate their exchange rates, and (b) the nature of the Chinese exchange rate regime since July 2005. On the first issue, we investigate the roles of economic variables consistent with the IMF definition of manipulation - the partners' overall current account/GDP, its reserve changes, and the real overvaluation of its currency - but also some variables suggestive of American domestic political considerations - the bilateral trade balance, US unemployment, and an election year dummy. The econometric results suggest that the Treasury verdicts are driven heavily by the US bilateral deficit, though other variables also turn out to be quite important. On the issue of China's de facto exchange rate regime, we apply the technique introduced by Frankel and Wei (1994) to estimate implicit basket weights, adding several refinements. Within 2005, the de facto regime remained a peg to the dollar. However, there was a modest but steady increase in flexibility subsequently. We test whether US pressure has promoted RMB flexibility. We also test whether the recent appreciation against the dollar is due to a trend appreciation against the reference basket or a declining weight on the dollar in the reference basket, and suggest that they have different policy implications.

11 comments:

Term Paper said...

http://www.masterpapers.com/term_papers.php
Our custom term paper writing service is committed to deliver only quality term papers, research papers, and college term papers.
Term Paper

dissertation help said...

great post

Write a term paper(www.writeatermpaper.com) said...
This comment has been removed by the author.
Jack said...

I think "Assessing China's Exchange Rate Regime" produces very useful information.

For more Research Paper Writing

Write a term paper(www.writeatermpaper.com) said...

Write a term paper offers writing for college term papers help on term paper topics free termpaper ideas term paper outline and term paper format.
for more details
writeatermpaper

dianna.rose83@gmail.com said...

Many institutions limit access to their online information. Making this information available will be an asset to all.

Research Writer said...

Many institutions limit access to their online information. Making this information available will be an asset to all.
Term Paper Writing

daniel john said...

Advantageously, the blog post is actually the freshest on this notable subject. I harmonize with your conclusions and will eagerly look forward to see your upcoming updates. Just saying thanks will not just be enough, for the awesome clarity in your writing. I will right away grab your rss feeds to stay informed of any updates. Authentic work and much success in your business efforts!

Custom Term Papers

metin2gogo said...

nike air jordan force 20 ajf20 mid navy white 1416

nike air jordan force 20 ajf20 mid white red black 1415

nike air jordan force 3 ajf3 black fire red cement grey white 1382

nike air jordan force 3 ajf3 white fire red cement grey black 1378

nike air jordan force 3 ajf3 white metallic silver black varsity maize 1379

nike air jordan force 3 ajf3 premier the best on earth edition black varsity red metallic gold white 1381

nike air jordan force 3 ajf3 premier the best on mars edition white varsity red metallic gold 1380

nike air jordan force 4 ajf4 black red 1384

nike air jordan force 4 ajf4 off white military blue neutral grey 1388

nike air jordan force 4 ajf4 white varsity red black 1385

nike air jordan force 4 ajf4 white vivid pink techno blue 1386

nike air jordan force 4 ajf4 ls white varsity red cement grey black 1387

nike air jordan force 5 ajf5 black varsity red blue ribbon new blue 1397

nike air jordan force 5 ajf5 black varsity red white 1396

nike air jordan force 5 ajf5 stealth white black bright cactus 1393

nike air jordan force 5 ajf5 white carrot lemon 1391

nike air jordan force 5 ajf5 white varsity red black 1390

nike air jordan force 5 ajf5 low black black varsity red white 1395

metin2gogo said...

nike air jordan force 5 ajf5 low white white varsity red white 1394

nike air jordan force 5 ajf5 ls white orange blue chill maize 1392

nike air jordan force 5 ajf5 premier grey nurse dark army midnight navy soft grey varsity red 1389

nike air jordan force 6 ajf6 black black vivid pink 1403

nike air jordan force 6 ajf6 white black electrolime 1401

nike air jordan force 6 ajf6 white black varsity red 1400

nike air jordan force 6 ajf6 white court blue university blue 1399

nike air jordan force 6 ajf6 5 8th black stealth varsity red 1404

nike air jordan force 6 ajf6 5 8th white pure purple neo turq 1402

nike air jordan force 6 ajf6 ls white infrared black 1398

nike air jordan force 9 ajf9 black varsity red dark charcoal 1410

nike air jordan force 9 ajf9 white black university blue 1409

nike air jordan force 9 ajf9 white varsity red black 1406

nike air jordan force 9 ajf9 white white liquid lime 1408

nike air jordan force 9 ajf9 low ls white midnight navy 1405

nike air jordan iii 3 retro countdown split black cement grey varsity red 120

nike air jordan retro 6 vi premium motorsports white black 162

nike air jordan vii 7 retro dmp split black dark charcoal true red 173

metin2gogo said...

nike air jordan vii 7 retro dmp split white varsity royal black 174

nike air jordan xiii 8 retro countodown split white red black 184

nike air jordan xix 19 countdown split black varsity red 302

nike air jordan xv 15 countdown split black varsity red 272

nike air jordan xviii 18 countdown split black red 294

nike air jordan xx 20 countdown split black black 313

nike air jordan xxi 21 varsity red black silver 321

nike air jordan xxi 21 countdown split black varsity red 320

nike air jordan xxii 22 countdown split black white red 332

nike air max lebron vii cool grey cool grey white 1441

nike air max lebron vii white black varsity red 1447

nike air max lebron vii dunkman black black electric green 1442

nike air max lebron vii 7 black black 1446

nike air max lebron vii 7 black white metallic gold 1443

nike air max lebron vii 7 white varsity red 1445

nike air max lebron vii 7 xmas edition team red metallic silver black hot red 1444

nike air max lebron vii ps black white sport red metallic gold 1439

nike air max lebron vii ps pop playoff pack white black sport red 1440