A Study On Exchange Rate System In Open Economies

This paper is based on open economy and finance freedom which makes economy progress. But at the same time, finance freedom causes economy crisis. It analyses what is the fittest exchange rate system. to make economy developing and stop economy crisis . This paper analyses and contrasts fixed rate system and floated rate system. Under actual and financial concussion, different exchange rate acts on monetary policy and finical policy on the MF model, and causes the fluctuatation of a national economy. It proves floated rate system is the future goal. By the incompatible trinity, floated rate system is the future goal. Now Chinese exchange rate system is wrong in many aspects. but we can not fit floated exchange rate . It means our finance will be active. In a long run, we can abandon fixed rate system and accept floated rate system. But in the transition we will face a new choice of exchange rate system. We should select elasticer rate system. After analyses we find monetary zone. is better for us than floated and managed rate system . Optimum Currency Area came out. It brought theory to conduct some countries.Economics and European monetary cooperation made it developing and full. In view of the OCA theory and European experience, this paper provides a fit anchor for asian monetary cooperation. Asian moneytrary cooperation will turn ture...