This paper deals with the recent attempt to determine the supposed undervaluation of the Chinese Yuan versus the American dollar. It discusses different economic approaches to determine the
real exchange
rate such as
purchasing power parity (PPP),
fundamental equilibrium exchange rate (FEER), and behavioral equilibrium exchange rate (BEER). Finally it ventures to determine a real exchange rate with simple tool based on purchasing power parity and ideas drawn from the Balassa-Samuelson hypothesis. Introduction The Statistics of Papers On The Equilibrium Exchange Rate For The Chinese Currency Approaches Based On an Economic Theory Purchasing Power Parity Approach Fundamental Equilibrium Exchange Rate Behavioral Equilibrium Exchange Rate Estimating a Fair Value with Simple Tools The Concept of the Big Mac Index Purchasing Power Parity as the Determinant of Real Long-Term Exchange Balassa-Samuelson Hypothesis Conclusion References Appendix
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