The Real Bilateral Exchange Rate of RMB and Sino-Korean Trade Balance——An Empirical Research Based on Time Series

doi:10.16382/j.cnki.1000-5579.2007.04.020

Abstract

Abstract:

Applying a co-integration and error correction model and employing bilateral data from 1991 Q1 to 2005 Q4, this paper attempts to explore the relationship between bilateral real exchange rate of RMB and Sino-Korea trade balance.The result indicates that there is a steady long-term relationship between bilateral real exchange rate of RMB and Sino-Korea trade balance.However, since the elasticity of exchange rate is too small, the change of exchange rate has a limited influence on Sino-Korea trade balance.In a short-run there is no lag on Sino-Korea trade balance processed by the real exchange rate.The slow appreciation of RMB will not bring great fluctuation to Sino-Korea trade balance.

Key words: RMB exchange rate, bilateral exchange rate, real exchange rate, trade balance

CLC Number:

F752
F832

Yan ZHOU, Ya-li JIA. The Real Bilateral Exchange Rate of RMB and Sino-Korean Trade Balance——An Empirical Research Based on Time Series[J]. Journal of East China Normal University (Philosophy and Social Sciences), 2007, 39(4): 104-110.

Figures/Tables 8

References 11

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