Abstract

http://ssrn.com/abstract=2050316
 


 



Exchange Rate Misalignment - The Case of the Chinese Renminbi


Yin-Wong Cheung


City University of Hong Kong - Department of Economics & Finance; University of California at Santa Cruz - Department of Economics

April 30, 2012

CESifo Working Paper Series No. 3797

Abstract:     
Assessing exchange rate misalignment is not an easy task. With reference to the debate on the value of China’s currency, the renminbi (RMB), this article highlights a few challenges in properly assessing the extent of currency misalignment. The results derived from the fundamental equilibrium exchange rate (FEER) approach and the Penn effect regression are used to illustrate the sensitivity of misalignment estimate to assumptions of the key parameters in a given model, sampling uncertainty, serial correlation adjustment, and data revision. It is shown that both the sign and the magnitude of a misalignment estimate could be dramatically affected by these factors.

Number of Pages in PDF File: 25

Keywords: FEER, Penn effect, sampling uncertainty, serial correlation, data revision

JEL Classification: F310, F410

working papers series





Download This Paper

Date posted: May 3, 2012  

Suggested Citation

Cheung, Yin-Wong, Exchange Rate Misalignment - The Case of the Chinese Renminbi (April 30, 2012). CESifo Working Paper Series No. 3797. Available at SSRN: http://ssrn.com/abstract=2050316

Contact Information

Yin-Wong Cheung (Contact Author)
City University of Hong Kong - Department of Economics & Finance ( email )
83 Tat Chee Avenue
Kowloon
Hong Kong
University of California at Santa Cruz - Department of Economics ( email )
1156 High Street
Santa Cruz, CA 95064
United States
Feedback to SSRN


Paper statistics
Abstract Views: 912
Downloads: 209
Download Rank: 87,449

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.250 seconds