Dixon, R. and Zhang, Z. and Dai, Y. (2016) 'Exchange rate flexibility in China : measurement, regime shifts and driving forces of change.', Review of international economics., 24 (5). pp. 875-892.
With an emphasis on government intervention that hinders market forces in currency movements, this paper presents a nuanced investigation of the degree and dynamics of flexibility in China's exchange rate regime. A high-frequency data model is developed to more accurately detect the extent to which the Chinese currency is market-driven. This indicator is then utilized in a Markov switching model to examine shifts in RMB regime flexibility. The results suggest a moderate increase in exchange rate flexibility since the 2005 reform. Additionally, two switching states are captured, and possible driving factors are discussed.
|Full text:||(AM) Accepted Manuscript|
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|Publisher Web site:||http://dx.doi.org/10.1111/roie.12226|
|Publisher statement:||This is the accepted version of the following article: Dixon, R., Zhang, Z. and Dai, Y. (2016), Exchange Rate Flexibility in China: Measurement, Regime Shifts and Driving Forces of Change. Review of International Economics, 24(5): 875-892, which has been published in final form at http://dx.doi.org/10.1111/roie.12226. This article may be used for non-commercial purposes in accordance With Wiley Terms and Conditions for self-archiving.|
|Date accepted:||22 February 2016|
|Date deposited:||26 February 2016|
|Date of first online publication:||19 April 2016|
|Date first made open access:||No date available|
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