22 Pages Posted: 8 Mar 2012
Date Written: March 2012
Discussions on how best to exit from global imbalances to create a more balanced world economy have ignored the impact on poor countries of proposals to redress these imbalances. This paper aims at filling that gap. It gauges the degree of renminbi (RMB) undervaluation; presents evidence on RMB undervaluation and China’s GDP growth rate; surveys the role of the real effective exchange rate – both its level and its stability over time – for underpinning growth in developing countries, especially in large dual economies such as China and India; and finally, presents new evidence on growth linkages between China and poor countries for the last two decades and surveys literature on potential displacement effects of RMB appreciation. The analysis allows broad conclusions to be drawn about the potential developing‐country beneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years.
Suggested Citation: Suggested Citation
Garroway, Christopher and Reisen, Helmut and Hacibedel, Burcu and Turkisch, Edouard, The Renminbi and Poor‐Country Growth (March 2012). The World Economy, Vol. 35, Issue 3, pp. 273-294, 2012. Available at SSRN: https://ssrn.com/abstract=2018159 or http://dx.doi.org/10.1111/j.1467-9701.2011.01408.x
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