Asymmetric real exchange rate pass-through and poverty in China: evidence from a nonlinear model

Abstract

This article provides evidence on asymmetric real exchange rate pass-through to poverty for the Chinese economy by using the nonlinear auto-regressive distributed lag model spanning the period 1981–2012. The results corroborate the asymmetric pass-through predictions, with depreciations having a stronger impact on poverty. They also survive an alternative measure of poverty.

Keywords:

• real exchange rate pass-through
• asymmetries
• poverty
• China

JEL Classification:

• F41
• F31

Acknowledgements

The author thanks Y. Shin for providing the code on the NARDL model. Needless to say, the usual disclaimer applies.