Real exchange rate and manufacturing employment in China
نویسنده
چکیده
The impacts of the real exchange rate on employment and its channels are investigated. A real appreciation, 1) by decreasing the cost of imported inputs and increasing real wages expressed in tradable goods (technological channel), 2) by decreasing exports (export volume channel), 3) by exerting pressure on efficiency improvement (efficiency channel), exerts a negative effect on employment. Using the panel data of the 29 Chinese provinces for the period 19932002, the econometric results confirm the negative effects of the real appreciation of the Renminbi on manufacturing employment. The three channels are statistically significant, the technological channel being the most important.
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