This paper empirically extends the Edwards (1988) framework in search of the equilibrium RMB exchange rate. His model is based on the balance of the internal and external factors and provides a list of the relevant real “fundamentals” that determine the behavior of the equilibrium real exchange rate for developing countries. I modify his equations to incorporate some Chinese special characteristics by inserting unemployment and foreign reserves, I find that RMB should have depreciated for the convergence of the equilibrium level.
|Publication status||Published - Dec 2014|
|Event||The 8th Biennial Conference of Hong Kong Economic Association - Shandong University, Jinan, China|
Duration: 13 Dec 2014 → 14 Dec 2014
|Conference||The 8th Biennial Conference of Hong Kong Economic Association|
|Period||13/12/14 → 14/12/14|
|Other||The Hong Kong Economic Association and Shangdong University|