The fog encircling the renminbi debate

Yin-Wong Cheung; Menzie D. Chinn; Eiji Fujii

doi:10.1142/9789812834515_0006

The fog encircling the renminbi debate

Yin-Wong Cheung
, Menzie D. Chinn
, Eiji Fujii

Research output: Chapters, Conference Papers, Creative and Literary Works › RGC 12 - Chapter in an edited book (Author) › peer-review

Abstract

We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed.

Original language	English
Title of host publication	Exchange Rate Systems and Policies in Asia
Publisher	World Scientific Publishing Co. Pte Ltd
Pages	119-134
ISBN (Print)	9789812834515, 9789812834508
DOIs	https://doi.org/10.1142/9789812834515_0006
Publication status	Published - 1 Jan 2008
Externally published	Yes

Research Keywords

Exchange rate uncertainty
International reserves
Policy dependence
Trade surplus

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abstract = "We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed.",

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N2 - We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed.

AB - We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed.

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KW - International reserves

KW - Policy dependence

KW - Trade surplus

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BT - Exchange Rate Systems and Policies in Asia

PB - World Scientific Publishing Co. Pte Ltd

ER -

The fog encircling the renminbi debate

Abstract

Research Keywords

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