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Effects Of Chinese Currency Revaluation On World Fiber Markets

Author

Listed:
  • SUWEN PAN
  • SAMARENDU MOHANTY
  • MARK WELCH
  • DON ETHRIDGE
  • MOHAMADOU FADIGA

Abstract

A partial equilibrium model is used to analyze effects of Chinese currency revaluation on world fiber markets. Unique characteristics of this model include incorporation of a regional supply response of cotton, substitutability between cotton and manmade fibers, and linkage between raw fiber and textile sectors. Simulation results show renminbi revaluation is likely to increase China’s fiber imports and lower domestic cotton prices. Internationally, the world cotton price, polyester price, and cotton trade are expected to increase. A scenario modeling currency devaluation in China is run to test the stability of the model and ascertain its accordance with economic theory. (JEL F17, F42, F47, O2)

Suggested Citation

  • Suwen Pan & Samarendu Mohanty & Mark Welch & Don Ethridge & Mohamadou Fadiga, 2007. "Effects Of Chinese Currency Revaluation On World Fiber Markets," Contemporary Economic Policy, Western Economic Association International, vol. 25(2), pages 185-205, April.
    • Handle: RePEc:bla:coecpo:v:25:y:2007:i:2:p:185-205
    DOI: 10.1111/j.1465-7287.2006.00025.x
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    References listed on IDEAS

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    Cited by:

    1. Muhammad, Andrew & McPhail, Lihong Lu & Kiawu, James, 2012. "Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(2), pages 1-15, May.

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    More about this item

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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