Can Chinese Yuan Revaluation Decrease the Sino-U.S. Bilateral Trade Surplus?
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| Title | Can Chinese Yuan Revaluation Decrease the Sino-U.S. Bilateral Trade Surplus?
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| Author | Yu Miaojie |
| Organization | CCER |
| Email | mjyu@ccer.edu.cn |
| Key Words | Exchange Rate; Pass-through; Bilateral Trade; Gravity Model |
| Abstract | In 2005, China abated its fixed exchange rate against the U.S. dollar and began to revaluate. This paper investigates the effect of the Chinese Yuan revaluation on the Sino-U.S. bilateral trade based on a theoretical gravity model using industrial panel data during the period 2002-2007. An extensive empirical search shows that the Chinese Yuan revaluation against the U.S. dollar significantly reduced the Sino-U.S. bilateral trade. These findings are robust to different econometric methods and different period coverage. |
| Serial Number | wp37 |
| Time | 2011-01-10 |
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