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Author(s): |
Yonghong Jiang, Institute of Finance, Jinan University, Guangzhou, China;Department of Economics, University of Wisconsin-Eau Claire, United States
Fangfang Zhang, Institute of Finance, Jinan University, Guangzhou, China
Wayne CARROLL, Department of Economics, University of Wisconsin-Eau Claire, United States
Fanglong Dai, Institute of Finance, Jinan University, Guangzhou, China
Yuli Zou, Institute of Finance, Jinan University, Guangzhou, China |
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Abstract: |
This paper aims to place the debate about the degree of RMB’s misalignment by estimating the long run equilibrium exchange rate. Among various theories and approaches, we choose the behavioral equilibrium exchange rate (BEER) as our estimating model, identifying the term of trade, GDP, money supply, and foreign exchange reserve as explanatory variables. According to the empirical analysis, our result indicates that currently RMB is slightly overvalued.
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