The Effect of RMB/Dollar Ezchange Rate Variation on Sino-US Trade Balance: An Analysis Based on Marshall-Lerner Condition
The paper empirically investigates the effect of RMB/Dollar exchange rate variation on Sino-US trade balance based on Marshall-Lerner condition. Through the regression of a VAR model, we estimate the price and real income elasticity of Chinas import and export with China and find that that Marshall-Lerner condition is satisfied, which suggests that the appreciation of RMB could be helpful to alleviate the US trade deficit with China in the short run. However, we also find that the real income elasticity of Chinas export to the US is much larger than the price elasticity, which implies mat the changes in real income of the US affect Chinas exports to the US more significantly than that of RMB exchange rate variation. Therefore, only the appreciation of RMB or the adjustment of exchange rate policy in general by Chinese government, would not, suffice to improve the US trade imbalance with China.
RMB/Dollar ezchange rate Price Elasticity of Import Price Elasticity of Ezport real income Elasticity
Chunjiao Yu Jie Huang
School of Business, Hubei University, Wuhan, 430062, China
国际会议
第八届武汉电子商务国际会议(The Eighth Wuhan International Conference on E-Business)
武汉
英文
1661-1667
2009-05-30（万方平台首次上网日期，不代表论文的发表时间）