The Impacts of the Dollar-renminbi Exchange Rate Misalignment on the China-United States Commodity Trade PDF Download
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Author: Sabrine Ferjani
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Contrary to most existing studies of the literature that assumed that the effects of real exchange rate (RE) misalignment on trade flows are symmetric, this paper considers a more general and realistic framework allowing for possible asymmetric effects. We use monthly time-series data over the January 2002-October 2020 period from 66 two-digit industries that trade between China and the U.S. in order to avoid the well-known aggregation bias. Estimates of symmetric error-correction models (ECM) revealed that real dollar-renminbi rate misalignment has short-run effects on 35 U.S. exporting and 53 U.S. importing industries. These short-run effects translated into the long run in 18 and 17 industries, respectively. The numbers increased considerably when estimating asymmetric ECM. Indeed, short-run asymmetric effects were then found in 47 U.S. exporting and 62 U.S. importing industries, which translated into long-run asymmetric effects in 20 U.S. exporting and 21 U.S. importing industries. Our analysis highlights the importance of separating currency overvaluation from currency undervaluation in assessing the effects of the RE misalignment on trade flows between the U.S. and China and confirms that the impacts are industry specific. Our findings (robust to possible structural breaks) are useful for trading industries, and policymakers, and advocate accounting for asymmetries when examining the RE misalignment-trade flows nexus.
Author: Sabrine Ferjani
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Contrary to most existing studies of the literature that assumed that the effects of real exchange rate (RE) misalignment on trade flows are symmetric, this paper considers a more general and realistic framework allowing for possible asymmetric effects. We use monthly time-series data over the January 2002-October 2020 period from 66 two-digit industries that trade between China and the U.S. in order to avoid the well-known aggregation bias. Estimates of symmetric error-correction models (ECM) revealed that real dollar-renminbi rate misalignment has short-run effects on 35 U.S. exporting and 53 U.S. importing industries. These short-run effects translated into the long run in 18 and 17 industries, respectively. The numbers increased considerably when estimating asymmetric ECM. Indeed, short-run asymmetric effects were then found in 47 U.S. exporting and 62 U.S. importing industries, which translated into long-run asymmetric effects in 20 U.S. exporting and 21 U.S. importing industries. Our analysis highlights the importance of separating currency overvaluation from currency undervaluation in assessing the effects of the RE misalignment on trade flows between the U.S. and China and confirms that the impacts are industry specific. Our findings (robust to possible structural breaks) are useful for trading industries, and policymakers, and advocate accounting for asymmetries when examining the RE misalignment-trade flows nexus.
Author: Amy Hilland
Publisher:
ISBN:
Category : China
Languages : en
Pages : 268
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Book Description
Author: United States. Congress. House. Committee on Financial Services. Subcommittee on Domestic and International Monetary Policy, Trade, and Technology
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 120
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Book Description
Author: Imad Moosa
Publisher: Edward Elgar Publishing
ISBN: 1781001553
Category : Business & Economics
Languages : en
Pages : 321
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Book Description
'Imad Moosa reminds us that there are at least two sides to a relationship – including those in trade – and that failure of a relationship is rarely due to one side alone. Moosa handles the technicalities of exchange rates dexterously but reminds us constantly of the wider context of the trade relationships that determine them.' – Paul Rule, La Trobe University, Melbourne, Australia Dealing with a topic that has attracted significant media attention, this highly accessible book provides a detailed analysis of the trade dispute between China and the US. While the Americans accuse China of damaging their economy, the Chinese claim their policies are legitimate and that the US has no right to dictate how the Chinese economy should be run. Imad Moosa addresses contentious issues including: whether the Chinese currency is undervalued, whether the undervaluation of the yuan, should it exist, is the cause of the US trade deficit with China (hence revaluation being a justifiable cure) and whether Chinese economic policies are immoral and illegal according to IMF and WTO rules. This challenging and thought provoking book will prove a stimulating read for academics, researchers, students and policymakers with an interest in international economics, international finance, political economy and Asian studies.
Author: Melissa Murphy
Publisher: CSIS
ISBN: 0892065907
Category : Business & Economics
Languages : en
Pages : 28
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Book Description
Though China is still a long way off from challenging the U.S. dollar's global reserve currency status, as the largest holder of U.S. debt, Beijing is undoubtedly nervous about the prospect of a weaker dollar and is taking steps to diversify its reserves, as well as to internationalize the renminbi. There also seems little doubt that in the next decade China will emerge as a major player in the international financial system. Given the strategic geopolitical and economic implications of these developments, the following report attempts to provide a clearer understanding of what is motivating Beijing's current moves, where its policy is likely headed, and the implications for the United States.
Author:
Publisher: DIANE Publishing
ISBN: 1437941885
Category :
Languages : en
Pages : 37
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Book Description
Many Members of Congress charge that China's policy of accumulating foreign reserves (especially U.S. dollars) to influence the value of its currency constitutes a form of currency manipulation intended to make its exports cheaper and imports into China more expensive than they would be under free market conditions. They further contend that this policy has caused a surge in the U.S. trade deficit with China and has been a major factor in the loss of U.S. manufacturing jobs. Although China made modest reforms to its currency policy in 2005, resulting in a modest appreciation of its currency, many Members contend the reforms have not gone far enough and have warned of potential legislative action. This report summarizes the main findings in CRS Report RL32165, China's Currency: Economic Issues and Options for U.S. Trade Policy, by Wayne M. Morrison and Marc Labonte, and will be updated as events warrant.
Author: Mr.Sonali Das
Publisher: International Monetary Fund
ISBN: 1498302025
Category : Business & Economics
Languages : en
Pages : 31
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Book Description
China’s exchange rate regime has undergone gradual reform since the move away from a fixed exchange rate in 2005. The renminbi has become more flexible over time but is still carefully managed, and depth and liquidity in the onshore FX market is relatively low compared to other countries with de jure floating currencies. Allowing a greater role for market forces within the existing regime, and greater two-way flexibility of the exchange rate, are important steps to build on the progress already made. This should be complemented by further steps to develop the FX market, improve FX risk management, and modernize the monetary policy framework.
Author: Mohsen Bahmani-Oskooee
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
In 1978 when China began her economic reforms of moving toward a free market economy and trade liberalization, the trade balance between China and the United States was in favor of the United States in the magnitude of 600 million dollars. Over the 1978-2002 period, however, it has changed in favor of China such that in 2002 China had a surplus of 120 billion dollars against the United States. Over the same period, the Chinese yuan has depreciated almost fourfold. Is real depreciation of the yuan against the dollar a factor in the trade between the two countries? In this article, we employ data at the industry level (88 two- and three-digit industries) and recent advances in error-correction modeling to show that indeed the real yuan-dollar rate has played a significant role. This contradicts most previous research that used trade data at the aggregate level.
Author: U.S.-China Economic and Security Review Commission
Publisher:
ISBN:
Category : China
Languages : en
Pages : 256
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Book Description
Author: Aaditya Mattoo
Publisher: International Monetary Fund
ISBN: 1475516878
Category : Business & Economics
Languages : en
Pages : 39
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Book Description
This paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, which we call the "spillover effect". We use recent theory to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. We exploit the variation - afforded by disaggregated trade data - across exporters, importers, product, and time to estimate this spillover effect. We find robust evidence of a statistically and quantitatively significant spillover effect. Our estimates suggest that a 10 percent appreciation of China's real exchange rate boosts on average a developing country's exports of a typical 4-digit HS product category to third markets by about 1.5-2 percent. The magnitude of the spillover effect varies systematically with product characteristics as implied by theory.
