Dual Exchange Rate Transmission Theory And Empirical Research

The functioning of the real economy depends on the virtual economy, which provide financial support, but over-development virtual economy will affect the real economy, as 2008 financial crisis in Europe and other countries for example. International macroeconomic fluctuations will pass though to our real economy by exchange rate.July 21,2005, the PBOC announced that the RMB exchange rate peg on a basket of currencies. After that China's overall trade surplus continued to increase and RMB is facing international deficit countries, which put pressure on the appreciation of the RMB. Besides, China has also accelerated the openness of the capital market, the expected appreciation of the RMB, attracting a large influx of hot money.Base on this, Studying RMB exchange rate volatility transmission effect have theoretical and practical significance. Previous studies on the exchange rate pass-through based on the product market, the biggest innovation of this paper is that a comprehensive consideration of product, capital markets, exchange rate pass-through. Analysis exchange rate two transmission mechanism, and the delay and the size of exchange rate affect. Then give advices on trade policy making, inflation control, exchange rate regime reforming such macro issues.This article have theoretical and empirical analysis and is divided into five parts, containing classic literature reviewing, exchange rate pass-through delivery mechanism proposing, empirical analysis, policy advises. Each part of the main contents are as follows:The first chapter is a brief description of the background, significance, research methods and possible innovations.The second chapter is literature review. Macro and micro analysis from the perspective of domestic and foreign exchange rate pass incomplete causes and trends of the theoretical and empirical research to identify as a breakthrough innovation.The third chapter is the theoretical mechanism of reference and structure. Introduced the concept of exchange rate pass, exchange pass-though classical theory. Analysis of the exchange rate transmission mechanism and the effect of exchange rate pass measure, as empirical research has laid the solid theoretical basis.The fourth chapter is the empirical study. Starting from the law of one price, analysis the exchange pass-though both on good and asset market. The theoretical model by constructing the transmission of asset markets is a major innovation of this paper. By the VAR model, we use impulse response function to calculate the exchange rate pass size and speed.The fifth chapter is empirical and policy content review. Based on the results of empirical research, we put forward advices on China's trade balance adjustment, monetary policy making, economic, financial market liberalization.