Real exchange rate misalignment in China: An empirical investigation

Zhang, Z.

doi:10.1006/jcec.2000.1705

Real exchange rate misalignment in China: An empirical investigation

Zhang, Z.

Authors

Dr Zhichao Zhang zhichao.zhang@durham.ac.uk
Assistant Professor

Abstract

Based on the theory of equilibrium real exchange rate, this paper estimates the behavioral equilibrium exchange rate and the resulting misalignment in China. Evidence shows chronic overvaluation in China's central planning period, but economic reforms have brought the real exchange rate closer to equilibrium. The cumulative effect of exchange rate reform led to a substantial real depreciation of the Chinese currency after 1981. Indications are that China now has a proactive exchange rate policy with the nominal exchange rate used as a policy tool to attain real targets.

Citation

Zhang, Z. (2001). Real exchange rate misalignment in China: An empirical investigation. Journal of Comparative Economics, 29(1), 80-94. https://doi.org/10.1006/jcec.2000.1705

Journal Article Type	Article
Publication Date	2001-03
Deposit Date	Apr 2, 2007
Journal	Journal of Comparative Economics
Print ISSN	0147-5967
Electronic ISSN	1095-7227
Publisher	Elsevier
Peer Reviewed	Peer Reviewed
Volume	29
Issue	1
Pages	80-94
DOI	https://doi.org/10.1006/jcec.2000.1705
Public URL	https://durham-repository.worktribe.com/output/1589388