Responsiveness of the U.S. Trade Flows to Changes in Chinese Currency

This study examines the trade flows between the U.S. and China to find the effect of changes in the renminbi on the U.S. trade deficit. The conclusions reveal that the U.S. imports from China are more sensitive to changes in the U.S. income than the U.S. exports to China to the changes in the Chinese income level. Furthermore, a one percent appreciation of the renminbi leads to an about 0.82 percent decrease in the value of the U.S. imports from...