| With the situation of economy opening up and the amount of it increasing up gradually,andwith the complexion of wordwide economic crisis occursing on step by step and the financeimpact getting more and more obvious among countries ,the level of the RMB exchange rate inour country has become a main core economic variation that the area of theorities fromcountries ,industries, government and inland public concern about severely.Therefore,Not only bea sound standard of RMB exchange rate helpful to economy and business transaction between ourcountry and other countries,but also generate important significances that keep our economydeveloping chronically,stably,constantly and effectively.Especally since the new century Chineseeconomy has always been rising rapidly, meanwhile the stressure that the countries headed byAmerica request for appreciating RMB is more and more intense ,China S exchange rate has beena development pathway later on.But as a link of conversation between China and the world,thealteration level of exchange rate will significantly influences on domestic macro-economiy.Themain aim to develop Chinese macro-economy is maintainning the price,adding socialcareer,keeping the balance of international payments .Althouh among these goals promoting theeconomy increasing is the most important,only can complete it depends on the rest of threegoals.So during the time of deepening opening up continually,holding the standard ofprice,Increasing the employment and maintaining the balance of international payments wouldbecome more complex.For finishing the three macro-economic goals supports the equal ofChinese economy and outside one.In the progression of accomplishing internal and externalbalance,the exchange rate refered to the core economic variable quantity is essential for them.With the trends of globalization deepening,China'S policy about the exchange rate need tochange as the variation of the Chinese and world'economy developing.Because the formermonetary policy and institution has never been suitable for the developing case of Chineceeconomy today.So we resetted a great reform of the regime on exchange rate in order to make ourcountry's fluctuate economic syetem better. This reform alter the determitive institution in ourcountry and improve the float,which makes Chinese exchange rate deepen gradually ourregulation of major macro-economy,so it is the research on exchange rate that the influence onmain economic indexes in Chinese macro-control is putted on the important and outstandingposition.We study the relation between the exchange rate and the influence on major macro-economyindex on the basis of the three steady connections between exchange and price, full employmentand balance of income and outcome.Studying the feature and regular pattern of exchange rate is indeed in detail before discussing their connections.Firstly,in accordance of the reform aboutexchange rate since 2005,the monthly data of Real Effective Exchange Rate(REER) from 1994 to2010 is measured according to institution and policy of rate of exchange nowadays,in China,theREER is able to weigh the over real value and its contrast.We should adopt the total trade sum thatincludes the trade amount of China and the main trade partner is adopted to measure its foreigncurrency that forms weght in our exchange of RMB,and the RMB exchange rate which ismeasured dymatically would reflect the real value of RMB,.Therefore,it owns importantreferences and mirror as regard to the major economic items of macro-economy which is regulatedby the level of exchange rate.The authentic exchange rate value shows the real effective value which owns the feature ofprice because of valuing foreign currency ,and as an economic variation which owns character ofprice,the REER decides the wave of itself and has a way to be incline to balance.So only keepingChinese exchange rate in a reasonable and managed range during the business moving can weensure a steady progress of economy.There is an explicit analysis and comprehensiveconsideration on the REER of RMB whose short term or long term equalization and imbalancein the light of theory of balancing real exchange rate along with monthly data of REER that iscalculated from 1994 to 2010.We are able to discuss on the influence on the relation betweenresearching on the REER and major macro economic index.In China, during the time of the floatof exchange rate and other economic variation that is impacted,it is critical to grasp exchangeinteracting with the transportion of other economic variation more exactly for providing the policyof macro economic control wth elementary theoretical bases of regulation and practicalexperience.According to the goal which is achieved through daring to regulate the motion ofmacco economy by our government.in the following sections,We may study the exchange rateand its impact on them to finish the main aims of macro control to some the standard ofprice,increasing careers and the balance of international income.One of the key aims is stabilizing the price level, as a foreign currency value which weighsdomestic money ,the wave of REER must impact on the main economic variation of the pricelevel finally through the effect of economy conduction.The price indexes of input and output aremain factors which measure the price level of China.The variation of these two indexes willdirectly influence on the transformation of the whole country's price level,so it is necessary toestablish theoretical model of price standard and REER as well as select the correspondentinfluential variation of economy factor for analyzing the influence on our price level,which issupported by elementary theory of opening economy about macro-economy.Employment is a basement of benefitting the people,and is a basic condition and radicalpathway which improve the living standard of public.There are a series of aspects such as theprofits of people ,the situation of stable reform,as well as the great achievement of totallyconstructing well-to-do society being correlating with the situation of employment.Nowadays,the employment situation of our country is rather stern,on the one hand,there are plenties of remaininglabor force in our country,and these people transferred from villages to cities.As the improvrmentof agriculture productivity,on the other hand,the number of recent structure of industry absorbingthe labor force is limited,therefore,the imbalance between labor force supply and demond wouldlead our situation of employment to pessimism.We should set a general calculated balanced modelwhich is suitable for Chinese macro-developing cases and ought to analyse the variation of REERinfluencing on the first ,the second and the third industry,which offers references about the policiesto the macro-control aims that are finished by the variation of exchange rate adding working torelieve severe situation of getting jobs.The income and expenditure of internation is a property metastasis which is expressed bymonetary or currency receipts and payment resulted from dealings among countries.Two mainfactors which affected the receipts and payment of internation from opening countries are thestates about input-output trade and inflow and outflow capital,while the exchange rate is regardedas a main media of an account of international income and payment.The variation of REER willgenerate an important effect on the balance of trade and capital flow in China.After summarizingthe relevant theory of international balance of payment,in China,the real effective exchange rate ismade a positive analysis in terms of the Balance of Trade and Foreign DirectInvestment,separately,the effect on the balance of trade from the REER is analysed mainly throughthe application of Vector Error Correction Modle(VECM),while analyzing the impact on ForeignDirect Investment from REER is screened by the international panel data.
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