Analysis of the Long-Term Trend of the Exchange Rate of RMB Based on ICP’s Datum in 2011 Year

Hua Niu Niu¹, Yanxin Ma², Xiaoyuan Chu³

¹School of Statistics, Beijing Normal University, Beijing, China.
²Huhehaote Central Sub-Branch, Huhehaote, China.
³School of Economics and Resource Management, Beijing Normal University, Beijing, China.

DOI: 10.4236/tel.[phone]                

Abstract

This paper analyzes and compares the purchasing power parity (PPP) and exchange rate worldwide based on the datum of International Comparison Program (ICP) in the year 2005 and 2011. The results indicate that developing countries have been experiencing more substantial currency devaluation, while currency appreciation occurs mainly in high-income countries. After analyzing the relative price levels for 2011 and per capita income, we find that the relative price level is above 1.5 in most countries worldwide, while the relative price level is between 0.5 and 1 in a few high-income countries. When the per capita income is around $3000, the peering relationships of purchasing power parity and exchange rates are the most obvious.

Keywords

Purchasing Power Parity, International Comparison Program, Currency Appreciation, Exchange Rate

Conflicts of Interest

The authors declare no conflicts of interest.

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