Does Appreciation of the Renminbi Decrease Imports to the United States from China?

15 Pages Posted: 6 Oct 2012

See all articles by Miaojie Yu

Miaojie Yu

Peking University - China Center for Economic Research (CCER)

Date Written: October 2012

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 United States from China by augmenting the gravity model with the exchange rate. Using an industrial panel data set during the period 2002–2008 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 United States from China. This finding is robust to a variety of econometric methods and to coverage in different periods.

JEL Classification: F1, F2

Suggested Citation

Yu, Miaojie, Does Appreciation of the Renminbi Decrease Imports to the United States from China? (October 2012). Contemporary Economic Policy, Vol. 30, Issue 4, pp. 533-547, 2012. Available at SSRN: https://ssrn.com/abstract=2157791 or http://dx.doi.org/10.1111/j.1465-7287.2011.00260.x

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

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