Currency Appreciation, Rising Financial Asset Values, and Output Fluctuations in China

Yu Hsing, Wen-Jen Hsieh

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Applying a general equilibrium model and the Newey-West method, this article finds that real output in China has a positive relationship with real M2, the government deficit/GDP ratio, and the real stock price and a negative relationship with real appreciation. The expected inflation rate is insignificant. It is estimated that when the real effective exchange rate rises 1%, real GDP in China is expected to decrease by 0.938% and that a 1% increase in real stock prices would raise output by 0.126%.

Original languageEnglish
Pages (from-to)853-857
Number of pages5
JournalApplied Economics Letters
Volume16
Issue number8
DOIs
Publication statusPublished - 2009 Jul 14

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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