Is there any economic integration among China and her Western partners?
نویسندگان
چکیده
In this paper, we test the real interest parity, uncovered interest parity, and purchasing power parity (PPP) for China against the US, European Union, the UK, and Japan. The real interest parity is an aggregate measure of economic integration, which can be decomposed into the integration of two major markets: the financial market and the goods market. The integration of each market can be further investigated by two independent parity tests. The uncovered interest parity is a measure of financial integration; whilst the PPP is a measure of integration of the goods markets. The main findings of this paper are that there is a long way to go for a full integration in either goods market or financial market between China and her major economic partners of the US, European Union, the UK, and Japan.
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