In the late 1980s, Taiwan confronted a situation very similar to what China is facing today: heavy pressures for the domestic currency to appreciate. In 1986-1992, the new Taiwan dollar appreciated 58% against the US dollar after the authorities gave up foreign exchange market interventions in...

Is the real appreciation of the Chinese yuan essential for correcting global imbalances? The present study offers a new perspective to the debate by drawing upon the rich international experience embodied in World Bank's World Development Indicators database. We find that the price levels of...