BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 13/2009:
Renminbi misaligned - Results from meta-regressions
Iikka Korhonen ()
and Maria Ritola
Abstract: We collect data from 29 separate papers estimating the
equilibrium level and possible undervaluation of the Chinese currency, the
renminbi. These papers yield a total of 97 individual observations on
misalignment, which we analyse with the help of meta-analysis. We find that
the vast majority of observations point to renminbi undervaluation in
recent years and that the undervaluation is more pronounced when the US
dollar exchange rate is used instead of the real effective exchange rate.
We find several characteristics of papers and authors that clearly seem to
influence the reported misalignments. For example, when the author is
affiliated with an investment bank, the reported misalignment is smaller.
Using time-series techniques also results in lower estimates of
undervaluation. On the other hand, refereed journals seemingly are inclined
to publish papers that report larger misalignments. Results caution against
trusting too much in any one study concerning renminbi undervaluation.
Keywords: equilibrium exchange rate; exchange rate misalignment; meta-analysis; China; (follow links to similar papers)
JEL-Codes: C82; F31; (follow links to similar papers)
27 pages, September 10, 2009
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