【主讲】Yichen Gao (首都经济贸易大学)
【主题】Valuations of Chinese Exchange Rate—Evidence from China's External Trade 1994-2015
【时间】2016年5月13日 (周五) 15：30-17：00
【地点】上海财经大学经济学院楼701室
【语言】英文
【摘要】This project studies the treatment effect of major economic events on Chinese RMB from 1994 to 2015. The major economic events include the reform of Chinese exchange rate policy (January 1994, July 2005, June 2010, etc.); the Financial Crises (July 1997 and July 2008) and the accessing to WTO in December 2001. During 1994-2005, RMB was pegged to US dollar, therefore, the traditional average treatment effect methods failed. We develop a new estimation strategy by combining a novel panel data method and the purchasing power parity theory. After selecting the best models for regressions by three information criterion, we regress the external trade on those of other countries before the occurrences of major economic events. We exploit the dependence among countries to construct a counterfactual for China's external trade assuming absences of major economic events. Suggesting by the change in Chinese trade prices, we examine the valuations of RMB bilateral dollar rate. Based on this new estimation strategy, we find that RMB was undervalued by 24% due to the 1997 Asian Financial Crisis; the reform of Chinese exchange rate policy in July 2005 caused RMB overvalued by 4.9%; during 2008 Global Financial Crisis, Chinese authority stopped Chinese exchange rate policy reform and made RMB pegged to US dollar again, this decision made RMBundervalued again by 13.5%; the restart of the reform in June 2010 made RMB overvalued by 14.5%.
