2012•Caijing lilun yu shijianRequires access
Estimating RMB Equilibrium Real Exchange Rate and Misalignment analysis
Zhai Huan-huan
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Abstract
Based on the equilibrium exchange rate theory,considering the actual situation in China,learned from improved ERER model which proposed by Montiel,the equilibrium exchange rate model was built in the paper.After cointegration analysis,the model was revised.Estimating equilibrium real exchange rate by H-P filtering techniques,the rate misalignment was analyzed.The results show that cointegration can be found among real exchange rate,openness,government expenditure and foreign exchange reserves.And it is also found that exchange rate can self correct.Moreover,since the financial crisis in 2008,RMB real effective exchange rate is slightly overvalued,the opinion of China should appreciate RMB is unrealistic.