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Real exchange rate misalignment in China: An empirical investigation

Zhang, Z.



Based on the theory of equilibrium real exchange rate, this paper estimates the behavioral equilibrium exchange rate and the resulting misalignment in China. Evidence shows chronic overvaluation in China's central planning period, but economic reforms have brought the real exchange rate closer to equilibrium. The cumulative effect of exchange rate reform led to a substantial real depreciation of the Chinese currency after 1981. Indications are that China now has a proactive exchange rate policy with the nominal exchange rate used as a policy tool to attain real targets.


Zhang, Z. (2001). Real exchange rate misalignment in China: An empirical investigation. Journal of Comparative Economics, 29(1), 80-94.

Journal Article Type Article
Publication Date 2001-03
Deposit Date Apr 2, 2007
Journal Journal of Comparative Economics
Print ISSN 0147-5967
Electronic ISSN 1095-7227
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 29
Issue 1
Pages 80-94
Public URL