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Choosing an exchange rate regime during economic transition : the case of China.

Zhang, Z. (2001) 'Choosing an exchange rate regime during economic transition : the case of China.', China economic review., 12 (2-3). pp. 203-226.

Abstract

The choice of an appropriate exchange rate regime during economic transition is investigated through the case of China's 1994 reform programme. Within a game-theoretic framework, the paper compares welfare under alternative policy regimes. While not upsetting government welfare, China's exchange rate unification through a floating rate has compelling benefits as a means of aborting the multiple practice. Given the choice of a flexible rate regime for convertibility, numerical simulations show a managed floater is favourable and may additionally mitigate the credibility problem associated with convertibility. Simulation outcomes also reveal China's policy preference is to place a higher weight on competitiveness than on inflation.

Item Type:Article
Keywords:China, Exchange rate policy, Economic transition.
Full text:Full text not available from this repository.
Publisher Web site:http://dx.doi.org/10.1016/S1043-951X(01)00051-7
Record Created:21 Jun 2007
Last Modified:19 Mar 2010 16:19

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