Fiscal and exchange rate policies drive trade imbalances: New estimates

2021 ◽  
Author(s):  
Madi Sarsenbayev ◽  
Joseph Gagnon
Keyword(s):  
Exchange Rate ◽  
Trade Imbalances

THE FOG ENCIRCLING THE RENMINBI DEBATE

2007 ◽  
Vol 52 (03) ◽  
pp. 403-418 ◽  
Author(s):  
YIN-WONG CHEUNG ◽  
MENZIE D. CHINN ◽  
EIJI FUJII
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
Empirical Studies ◽  
Foreign Exchange Reserves ◽  
Rmb Exchange Rate ◽  
Trade Imbalances

We assess some recently advanced arguments for the claim that the RMB is undervalued. These arguments are those based on the direct valuation of the RMB, trade imbalances, the accumulation of foreign exchange reserves, and the degree of policy dependence. The extant evidence does not support a strong verdict regarding RMB undervaluation that meets the statistical standards of academic empirical studies. One interpretation is that the evaluation of the equilibrium RMB exchange rate is far more complicated than it appears. Another view is that the data are insufficiently informative. Some related policy concerns are also discussed.

scholarly journals Understanding the Sources of Friction in U.S.–China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment

2008 ◽  
Vol 7 (3) ◽  
pp. 61-95 ◽  
Author(s):  
Wing Thye Woo
Keyword(s):  
United States ◽  
Exchange Rate ◽  
The United States ◽  
Moral Imperative ◽  
Trade Relations ◽  
Trade Imbalances ◽  
China Trade ◽  
Rmb Appreciation ◽  
The Exchange Rate

China has been accused of exchange rate manipulation that has caused large U.S. trade deficits, which have reduced U.S. welfare by increasing unemployment and reducing wages. In fact, the strong claims by some observers that the trade imbalances are deeply deleterious to China's welfare almost make it a moral imperative for the United States to use tariffs to force an renminbi (RMB) appreciation for China's own good.

scholarly journals An inquiry into exchange rate misalignments as a cause of major global trade imbalances

2019 ◽  
Vol 46 (4) ◽  
pp. 902-924 ◽  
Author(s):  
Muhammad Ali Nasir ◽  
Karen Jackson
Keyword(s):  
Exchange Rate ◽  
Current Account ◽  
Trade Balance ◽  
Trade Deficit ◽  
Global Trade ◽  
Trade Surplus ◽  
Content Type ◽  
Trade Imbalances ◽  
Exchange Rate Misalignment ◽  
Practical Implications

Purpose In the context of debate on competitive devaluation and trade imbalances, the purpose of this paper is to investigate the role of exchange rate misalignment as a determinant of trade imbalances in selected major trade surplus (Germany, China, Japan, Russia and KSA) and major trade deficit countries (USA, UK, France, India and Turkey). Design/methodology/approach The authors used a structural vector auto-regressive model on data from ten countries with the highest trade deficit and surplus. The period of analysis is from 2000 Q1 to 2016 Q1. Findings The key findings suggest that although exchange rate misalignment from equilibrium may have some implications for the current account balance for surplus and deficit countries, the effects observed were rather very mild and transitory. There was a heterogeneity in the response of the current account position to exchange rate misalignment in each country, concomitantly; the exchange rate misalignment shall not be seen as the sole responsible factor in the debate on global trade imbalances. Research limitations/implications The research has profound implications in terms of exploring the notion of competitive devaluation and exchange rate misalignment as a cause of major global trade imbalances. Practical implications This study has important practical implications for the trade policy of major economies in the world. These are twofold. First, this study has analysed and reported on the degree of misalignment of exchange from its equilibrium values in the major trade surplus and deficit countries. Second, it has investigated the implications of any misalignment for the trade balance or respective economies. Social implications There are important social implications as the notion of competitive devaluation and exchange rate–trade balance nexus has been heavily politicised. This study provides an empirical insight and an answer to these claims which have social and political implications. Originality/value There is a significant element of originality and contribution to the existing body of knowledge on the subject. In the context of debate on competitive devaluation this is the first study which has investigated whether the exchange rate has been misaligned from its equilibrium values (competitive devaluation) and whether there is some nexus between the real exchange rate misalignment and trade imbalances in under-analysis economies.

Exchange Rate Parity for Trade and Development

1995 ◽  
Author(s):  
Pan A. Yotopoulos
Keyword(s):  
Exchange Rate ◽  
Rate Parity

Exchange Rate Forecasting

2000 ◽  
Author(s):  
Imad A. Moosa
Keyword(s):  
Exchange Rate ◽  
Exchange Rate Forecasting
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