Services on Demand
Journal
Article
Indicators
- Cited by SciELO
- Access statistics
Related links
- Similars in SciELO
Share
Investigación económica
Print version ISSN 0185-1667
Abstract
GONZALEZ GARCIA, Juan; GARCIA CONTRERAS, Jessica Jocelin and OSORIO NOVELA, Germán. The exchange rate policy of Mexico and China in the global economy. Inv. Econ [online]. 2022, vol.81, n.320, pp.131-155. Epub Feb 23, 2023. ISSN 0185-1667. https://doi.org/10.22201/fe.01851667p.2022.320.81521.
This article analyzes the impacts that misalignments of the real equilibrium exchange rate (REER) have generated on international trade and economic growth in Mexico and China between 1994-2018. The hypothesis is that China’s exchange rate policy was more effective than Mexico’s, given the results achieved in trade and growth over the period of analysis. To prove the hypothesis, econometric models were used to calculate the misalignments of the REER and their relationship with trade and economic growth. Our results indicate that China’s exchange rate policy has been more effective than Mexico’s and that any misalignment of the REER impairs trade and growth in both economies. The article concludes that Mexico should focus on achieving a real undervaluation of its exchange rate in the short term and generate the conditions to achieve an equilibrium in the long term. As for China the recommendation is to continue with its exchange rate policy.
Keywords : Exchange rate policy; REER; currency misalignment; economic growth; trade; C01; O57.