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How the Changes in Exchange Rate Affect the Chinese Economic Growth?

Fu, Qiong LU (2017) NEKP03 20171
Department of Economics
Abstract
This paper examines how the exchange rate affects Chinese economic growth. First, we go through the literature about exchange rate and how it affects the economic growth. We respectively analyze the transmission mechanism of RMB real effective exchange rate on the impact of Chinese import, export and foreign direct investment. We use the quarterly data from 1994 to 2016 and the method of cointegration test, Granger Causality test. From the test we found that the appreciation of RMB has a negative effect on Chinese economic growth. Further more, the correlation between total export and real effective exchange rate is negative. Meanwhile, the correlation between total import and real effective exchange rate is negative. For FDI, we found... (More)
This paper examines how the exchange rate affects Chinese economic growth. First, we go through the literature about exchange rate and how it affects the economic growth. We respectively analyze the transmission mechanism of RMB real effective exchange rate on the impact of Chinese import, export and foreign direct investment. We use the quarterly data from 1994 to 2016 and the method of cointegration test, Granger Causality test. From the test we found that the appreciation of RMB has a negative effect on Chinese economic growth. Further more, the correlation between total export and real effective exchange rate is negative. Meanwhile, the correlation between total import and real effective exchange rate is negative. For FDI, we found that the appreciation of RMB will decrease FDI. (Less)
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author
Fu, Qiong LU
supervisor
organization
course
NEKP03 20171
year
type
H2 - Master's Degree (Two Years)
subject
keywords
real effective exchange rate, economic growth, import, export, foreign direct investment.
language
English
id
8915422
date added to LUP
2017-06-14 13:51:05
date last changed
2017-06-14 13:51:05
@misc{8915422,
  abstract     = {This paper examines how the exchange rate affects Chinese economic growth. First, we go through the literature about exchange rate and how it affects the economic growth. We respectively analyze the transmission mechanism of RMB real effective exchange rate on the impact of Chinese import, export and foreign direct investment. We use the quarterly data from 1994 to 2016 and the method of cointegration test, Granger Causality test. From the test we found that the appreciation of RMB has a negative effect on Chinese economic growth. Further more, the correlation between total export and real effective exchange rate is negative. Meanwhile, the correlation between total import and real effective exchange rate is negative. For FDI, we found that the appreciation of RMB will decrease FDI.},
  author       = {Fu, Qiong},
  keyword      = {real effective exchange rate,economic growth,import,export,foreign direct investment.},
  language     = {eng},
  note         = {Student Paper},
  title        = {How the Changes in Exchange Rate Affect the Chinese Economic Growth?},
  year         = {2017},
}