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Exchange rate reform and its inflationary consequences: an empirical analysis for China

Lu, M.; Zhang, Z.

Authors

M. Lu



Abstract

In examining China's exchange rate policy in the reforming years, the study finds empirical evidence of its long-run inflationary consequences, but the effects appear not to be sizable. In the short run, while changes in the devaluation rate are positively correlated with the increase in the growth rate of inflation, the inflation inertia is also modest. The moderate inflationary cost of devaluations provides some explanation of the smooth transition of exchange rate policy regime in China and the authorities' ability to put more weight on external competitiveness.

Citation

Lu, M., & Zhang, Z. (2003). Exchange rate reform and its inflationary consequences: an empirical analysis for China. Applied Economics, 35(2), 189-199. https://doi.org/10.1080/0003684022000017575

Journal Article Type Article
Publication Date 2003-01
Deposit Date Mar 27, 2007
Journal Applied Economics
Print ISSN 0003-6846
Electronic ISSN 1466-4283
Publisher Taylor and Francis Group
Peer Reviewed Peer Reviewed
Volume 35
Issue 2
Pages 189-199
DOI https://doi.org/10.1080/0003684022000017575
Public URL https://durham-repository.worktribe.com/output/1597284