The RMB Debate: Empirical Analysis on the Effects of Exchange Rate Shocks in China and Japan

Soyoung Kim, Yoonbai Kim

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

For a better understanding of the ongoing debates on the RMB, this paper investigates the effects of exchange rate shocks on output and the current account for China and Japan. We use structural vector auto-regression models and find that yen appreciation reduces current account surpluses while having no strong effect on output in Japan. RMB appreciation, on the other hand, has an insignificant effect on the current account, although it tends to reduce output in China. For China, dollar pricing with vertical trade integration seems responsible for the insignificant effect on the current account.

Original languageEnglish
Pages (from-to)1539-1557
Number of pages19
JournalWorld Economy
Volume39
Issue number10
DOIs
StatePublished - Oct 1 2016

Bibliographical note

Publisher Copyright:
© 2016 John Wiley & Sons Ltd

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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