Abstract
ABSTRACT This study explores the possible existence of threshold kink effects in the impact of the real dollar-renminbi exchange rate misalignment on the bilateral trade flows between the United States and China. Empirical results show a significant threshold effect, with differential effects of undervaluation and overvaluation. Specifically, our findings suggest that while an overvaluation of the Chinese currency over 2.83% will attenuate the United States’ trade deficit with China, an undervaluation greater than 4.04% will deepen it. This suggests that a revaluation of the renminbi against the dollar would be helpful in improving the United States trade balance with China.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
