TY  - JOUR
AU  - Cheung,Yin-Wong
AU  - Chinn,Menzie D.
AU  - Fujii,Eiji
TI  - Pitfalls in Measuring Exchange Rate Misalignment: The Yuan and Other Currencies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14168
PY  - 2008
Y2  - July 2008
UR  - http://www.nber.org/papers/w14168
L1  - http://www.nber.org/papers/w14168.pdf
N1  - Author contact info:
Yin-Wong Cheung
Department of Economics
University of California
Santa Cruz, CA  95064
E-Mail: cheung@ucsc.edu

Menzie D. Chinn
Dept. of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI 53706
Tel: 608/262-7397
Fax: 608/262-2033
E-Mail: mchinn@lafollette.wisc.edu

Eiji Fujii
School of Economics
Kwansei Gakuin University
JAPAN
Tel: 81-798-547257
E-Mail: efujii@kwansei.ac.jp
AB  - We evaluate whether the Renminbi (RMB) is misaligned, relying upon conventional statistical methods of inference. A framework built around the relationship between relative price and relative output levels is used. We find that, once sampling uncertainty and serial correlation are accounted for, there is little statistical evidence that the RMB is undervalued, even though the point estimates usually indicate economically significant misalignment. The result is robust to various choices of country samples and sample periods, as well as to the inclusion of control variables.  We then update the results using the latest vintage of the data to demonstrate how fragile the results are. We find that whatever misalignment we detected in our previous work disappears in this data set.
ER  -