Research On Adjustment Of Monetary Policy In Our Country On The Condition Of External Disequilibrium

Internal and external equilibrium is ideal situation of economic development,howerer,it is always difficult to attain in the reality because domestic and foreign environment of economy will change the equilibrium.Along with the globalization of economy and finance,the scale of trade and capital flow is greater and greater which usually leads to extennal disequilibrium of national economy.Meanwhile,extermal disequilibrium will influenc domestic economy,and high degree of openness makes the effect more obvious.Therefore,the government needs to take some economic policies to adjust the macro-economy. A lot of economists have discussed about the problems in an open economy,including James Meade and Paul Krugman.They provided their own viewpoints in this field.There were also many researches about monetary policy and equilibrium in our country,but most of them only focused on the specifity of China's economy.Mundell-Fleming model is an classic model in the field of analysing the problem of internal and external equilibrium in an open economy.The model can provide important suggestions about the adjustment of policy. The model not only analysed product market,money market and balance of payment,but also discussed some main economic variables,such as interest rate,exchange rate and income.But in modern economy,some assumptions of the model have been lagging behind the economy. The assumption of static expectation on exchange rate is just not keeping with the reality of modern international market. In modern international financial market,the margin of exchange rate fluctuation is wider than before because of lagre fund scale and high speed of flow.And the expectation of exchange rate has been an important factor in judging the ratio of expected retrun.So it is necessary to correct these assumptions and established a new model. In this new framework,the introduction of dynamic expectation on exchange rate will change the conclusion of classic model.The process started with the character of BP curve and then the whole system will be influenced.The new model will be used to explain some related economic affairs whic happened in America,Japan and England to get some experiences and lessons.Finally,the problems encounted in the process of attaining equilibrium in our country, such as the independence of monetary policy and exchange rate,will be discussed.This paper will also analyse the role of monetary policy through new model and give some specific suggestions.