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The impacts of China’s exchange rate regime reform in 2005: A counterfactual analysis
Author(s) -
Du Zaichao,
Li Jie,
Pei Pei
Publication year - 2021
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12718
Subject(s) - counterfactual thinking , economics , china , exchange rate , index (typography) , exchange rate regime , baseline (sea) , macroeconomics , econometrics , monetary economics , philosophy , epistemology , world wide web , political science , computer science , law , oceanography , geology
This paper empirically evaluates the impacts of China’s exchange rate regime reform in 2005 on its macroeconomy. We propose to use a new counterfactual policy evaluation method that is robust to the choice of control group. Using the new method, we find that China’s exchange rate regime reform in 2005 mildly reduces the Consumer Price Index, has a substantial damping effect on export, significantly increases employment, and has negligible impact on industrial production.