A Study On The Impact Of Heterogeneous RMB Effective Exchange Rate On Output

China is a super-sized economy with a high degree of external dependence,and the change of RMB exchange rate has an important impact on the competitiveness of China’s goods,services and output.At the same time,China’s provinces have large economic size,large differences in natural endowments and industrial structures,and different trading partners.Whether will exchange rates influence provincial output in a different way?Therefore,on the basis of observing the typical features of Chinese economy,this thesis explores the heterogeneity of China’s inter-provincial effective exchange rate and its impact on output.This thesis calculates and measures the real effective exchange rate of RMB in each province(PREER),and the results show that the PREER features clearly heterogeneous.Then under the guidance of the Balassa-Samuelson hypothesis,a theoretical framework for PREER is established.From the perspective of China’s labor market characteristics and the differences in productivity between the provincial tradable and non-tradable sectors,the mechanism of "productivity-exchange rate" under the Balassa-Samuelson effect holds well among provinces.On the basis of determining the heterogeneity of inter-provincial effective exchange rate,a theoretical framework for the impact of heterogeneous exchange rate on output is established.Based on the AD-AS model,this thesis analyzes the main mechanism of exchange rate impacting on output,and focuses on the transmission mechanism of exchange rate at home from the perspective of domestic industrial division of labor.The theoretical model shows that exchange rate not only directly affects local output,but also indirectly affects output through industrial linkage with home trading partners.Also,the adjustment of domestic market integration on the output effect of exchange rates shows the two-way characteristics and multiple paths.This thesis verifies the effect of heterogeneous effective exchange rate on output and its mechanism.Empirical study results show that: the rise of PREER has a negative effect on output,and the impact shows significant inter-regional differences;exchange rates affect output levels through trade and foreign direct investment;as the division of domestic industrial division is introduced,the impact of exchange rate on output has both direct effect and indirect effect of inter-regional trade,and is concentrated in the provinces of resource-importing and resource-exporting respectively;Overall,domestic market integration reinforces the negative impact of exchange rates on output.In order to stabilize regional economic growth and promote harmonious regional development,this thesis proposes to improve the RMB exchange rate formation mechanism,promote the productivity in the non-tradable sector,improve the level of industrial linkage through innovation in the process of promoting domestic market integration,thus providing a carrier for the internal circulation.In order to mitigate external shocks,the macroeconomic policies should be tailor-made to reflect regional differences.