Selection Of Rmb Exchange Rate Regime Based On Welfare Analysis

It is crucial for one country with open economy to choose the right exchange rateregime. The problem on the renminbi exchange rate regime choice has been turningmore and more attention from both inside and outside on with the economicdevelopment and the deepening of integration both of the international economy andof the international finance.The theory on the choice of exchange rate regime is always the hot part in thefield of the research on the international economics and there have been many kindsof theory and the pattem which keeps development and creation in diverse directions.Based on the methodology of historical evolution and both the theoretical andexperiential analysis as well, here this thesis take the welfare as the start point ofresearch and apply the "new open economy macroeconomics" to build the "smallcountry model" which concerns the short run and the "big country model" whichconcerns the long run. Based on the economical reality in the short run, the "smallcountry model" analyzed the different welfare effect under the fixed and floatexchange rate regime with the shock of international real demand and internationalmerchandise price index; Based on the economic expectation in the long run, the "bigcountry model" analyzed the different welfare effect under the fixed and floatexchange rate regime with different country scale and openness.Both the small and the big country model are structural model and synthesizedthe experiential analysis and the methodology of normative and positive economics totake both qualitative and quantitative analysis. The two models have the consistentconclusion which is related to the current economic reality and future development: inorder to improve the welfare of people, the renminbi exchange rate regime should stepforward to be more flexible.