A Statistical Analysis On The Effect Of RMB Exchange Rate's Changes To China's Economy

As a comprehensive price index for the country to participate in the international economic activities, the exchange rate has implemented the function of the price change in the international finance and trade, and gradually become an important lever of adjusting the country's economic operation. Changes on the exchanges rate can bring the profound impact on the international trade balance and the domestic economic activities of the country, which is described as "a slight move in one part can affect the whole situation". With the enhancement of the integration between China and the global economy, the effect of RMB exchange rate on the economy is more significant and complex. Therefore, it is important to make the study on the exchange rate's effect to the country's economy. Accordingly, this paper provided the statistical analysis on the impact of the RMB exchange rate to China's economy from the perspective of the international trade, price and total output.This paper firstly introduced the research method and structure, made the theoretical and empirical analysis on the exchange rate's effect to the economy, and proposed the major innovations of the research. Secondly, it combed the changes and the formation mechanism of the RMB exchange rate, and through defining the nominal exchange rate as well as its effective measures, this paper further arranged the formation mechanism of all levels on the RMB exchange rate, which has sought the etymologies for the analysis of the exchange rate's effect on the economic.The cointegration and the HP filter separation method were used in this paper to analyze the long-run equilibrium relationship between the RMB exchange rate and China's international trade, price and output, as well as the effect and flexibility of all the variables. Besides, by using the panel data model approach, the paper has chosen China, Japan, Singapore as the research samples which shared the similar economic structure and starting point of the development, made the breakthrough to the traditional panel data model approach which focused on the same period of the data section, adopted the innovative research period with the close tendency for the three countries'exchange rate changes as well as in the same economical transition period, and explore the synergies and differences of the exchange rate's effect on the economy in the different countries. Finally, in order to provide a reference for the further research and development, the paper provided the conclusions on the policy-making for the RMB exchange rate based on China's current situation and the empirical results.