Does Appreciation of the RMB Decrease Imports to the U.S. from China?

31 Pages Posted: 23 Mar 2011

See all articles by Miaojie Yu

Miaojie Yu

Peking University - China Center for Economic Research (CCER)

Date Written: November 23, 2010

Abstract

In 2005, China abated its fixed exchange rate against the U.S. dollar and began to appreciate the Renminbi (RMB). In this paper, I explore the effect of the appreciation of the RMB on imports to the U.S. from China by augmenting the gravity model with the exchange rate. Using an industrial panel data set during the period 2002 to 2008 and controlling for the endogeneity of the bilateral exchange rate, this extensive empirical analysis suggests that the appreciation of the RMB against the U.S. dollar significantly reduced imports to the U.S. from China. This finding is robust to a variety of econometric methods and to coverage in different periods.

Keywords: Exchange Rate, Pass-through, Bilateral Trade, Gravity Model

JEL Classification: F1, F2

Suggested Citation

Yu, Miaojie, Does Appreciation of the RMB Decrease Imports to the U.S. from China? (November 23, 2010). Available at SSRN: https://ssrn.com/abstract=1792587 or http://dx.doi.org/10.2139/ssrn.1792587

Miaojie Yu (Contact Author)

Peking University - China Center for Economic Research (CCER) ( email )

Beijing, Beijing 100871
China
+86-10-6275-3109 (Phone)

HOME PAGE: http://mjyu.ccer.edu.cn

Register to save articles to
your library

Register

Paper statistics

Downloads
295
Abstract Views
1,175
rank
104,511
PlumX Metrics