Truths and myths about RMB misalignment : A meta-analysis

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Title: Truths and myths about RMB misalignment : A meta-analysis
Author: Cheung, Yin-Wong ; He, Shi
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
ISSN: 1456-5889
Series year: 2019
Series number: 3/2019
Year of publication: 2019
Publication date: 22.2.2019
Pages: 47
Subject (yso): valuuttakurssit
Keywords: Bofit-kokoelma; RMB; Kiina; mallit
JEL: C83; F31; F41
Other keywords: Bayesian Model Averaging (BMA); clustering effects; median probability model specification; RMB undervaluation; study characteristics
Abstract: We conduct a meta-regression analysis of 69 studies that generated 937 renminbi (RMB) misalignment estimates. The Bayesian Model Averaging (BMA) approach is adopted to allow for model selection and sampling uncertainties in assessing effects of study characteristics on these RMB misalignment estimates. Misalignment estimates are found to be influenced by the eight selected study characteristic types in our median probability model. The RMB misalignment estimate from models with various hypothetical combinations of study characteristics, however, is mostly insignificantly different from zero. It is also shown that the set of significant study characteristics is sensitive to the use of the least squares estimation method and the choice of benchmark study characteristics.
Table of contents: Abstract 4 1 Introduction 5 2 Preliminaries 7 2.1 Sample of studies 8 2.2 Study characteristics 9 2.2.1 Data characteristics 9 2.2.2 Theoretical and estimation specifications 10 2.2.3 Publication attributes 11 2.2.4 Subsample periods 12 3 Data analyses 12 3.1 Basic BMA results 14 3.2 Misalignment under hypothetical combinations of study characteristics 17 4 Additional analyses 19 4.1 Regression analysis 19 4.2 Alternative BMA results 20 5 Concluding remarks 23 References 24 Tables and figures 27 Appendices 39 A1 Sample of studies 39 A2 Percentage misalignment estimates: Descriptive statistics 41 A3 Study characteristic types 42 A4 Bayesian Model Averaging 44

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