Appreciation of the renminbi and urban-rural income disparity

Appreciation of the renminbi and urban-rural income disparity

[SHS:ECO] Humanities and Social Sciences/Economy and finances

income inequality

real exchange rate

China

Urban-rural inequality

Although poverty has been significantly decreased in China over the last twenty years, this decrease has been highly unequal across the provinces and has brought increased disparity in urban and rural per capita income. We studied the impact of exchange rate policy on urban-rural per capita income, which was marked by strong real depreciation before 1994 followed by moderate appreciation before stabilizing. We concluded that in the inland provinces where poverty is hardest, real appreciation has attenuated disparity whereas real depreciation had accentuated disparity. This result argues for a revaluation of the renminbi.

Guillaumont Jeanneney, Sylviane

Hua, Ping

2011-01-17

ENG

preprint

http://halshs.archives-ouvertes.fr/halshs-00556694

http://halshs.archives-ouvertes.fr/docs/00/55/66/94/PDF/2008.24.pdf