March 1, 2007 Working paper Assessing Chinas Exchange range Regime Jeffrey A. Frankel Harvard University and the Mossavar-Rahmani Center for Business and presidential term and Shang-Jin Wei IMF, CCFR, NBER and CEPR This draft paper was fain for the 44th Panel Meeting of Economic Policy, February 12, 2007. The authors would like to convey Yu anyuan Chen, Ellis Connolly and Chang Hong for outstanding research assistance; and to thank also for comments Jahangir Aziz, Morris Goldstein, Jianxiong He, Yun Jung Kim, Sunyoung Lee, Katharine Moon, and illusion Williamson.. Frankel would also like to thank the MossavarRahmani Center for Business and Government for support and to thank a number of officials in the Clinton and (current) provide exchequer Departments, at all levels, for discussion regarding the biannual reports to Congres.. incomplete they, nor any institutions with which the authors are associated, bear any responsibility for any views expressed in this paper, which are those of the authors alone. . Executive Summary The IMF Articles of Agreement nix a country from manipulating its currency for unfair advantage. The U.S. Treasury has been legally required since 1988 to report to Congress biannually regarding whether individual vocation partners are guilty of manipulation.
One part of this paper tests econometrically both competing sets of hypothesized determinants of the Treasury decisions: (1) legitimate economic variables consistent with the IMF definition of manipulation the partners overall current account/GDP, its reserve changes, and the real overrating of its currency, and (2) variables suggestive of domestic American political considerations -- the zygomorphous employment balance, US unemployment, and an election year dummy. The econometric results suggest that the Treasury verdicts are driven heavily by the US bilateral deficit, though other variables also turn out to be quite important. In 2005 China announced a switch over to a new exchange rate regime. The... If you want to engage a full essay, order it on our website: Orderessay
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