Exchange rate reform and its inflationary consequences: an empirical analysis for China
Exchange rate reform and its inflationary consequences: an empirical analysis for China
In examining China's exchange rate policy in the reforming years, the paper finds empirical evidence of its long-run inflationary consequences, but the effects appear to be not sizable. In the short-run, while changes in the devaluation rate are positively correlated with the increase in the growth rate of inflation, the inflation inertia is also modest. the moderate inflationary cost of devaluation provides some explanation of the smooth transition of exchange rate policy regime in China and the authorities' ability to put more weight on external competitiveness.
University of Southampton
Lu, M.
e7eb361f-81b6-4db9-a931-e200ac3afca2
Zhang, Z.
fd968521-9e43-4b50-b67e-3b6dfa095d13
January 1998
Lu, M.
e7eb361f-81b6-4db9-a931-e200ac3afca2
Zhang, Z.
fd968521-9e43-4b50-b67e-3b6dfa095d13
Lu, M. and Zhang, Z.
(1998)
Exchange rate reform and its inflationary consequences: an empirical analysis for China
(Discussion Papers in Economics and Econometrics, 9808)
Southampton, UK.
University of Southampton
Record type:
Monograph
(Discussion Paper)
Abstract
In examining China's exchange rate policy in the reforming years, the paper finds empirical evidence of its long-run inflationary consequences, but the effects appear to be not sizable. In the short-run, while changes in the devaluation rate are positively correlated with the increase in the growth rate of inflation, the inflation inertia is also modest. the moderate inflationary cost of devaluation provides some explanation of the smooth transition of exchange rate policy regime in China and the authorities' ability to put more weight on external competitiveness.
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Published date: January 1998
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Local EPrints ID: 32995
URI: http://eprints.soton.ac.uk/id/eprint/32995
PURE UUID: b034492a-cad6-45f0-a5f2-09cab372089f
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Date deposited: 05 Feb 2008
Last modified: 17 Oct 2022 17:32
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Author:
M. Lu
Author:
Z. Zhang
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