Research Of The Reputation Mechanism Of The Exchange Rate Policy Under The Fixed Exchange Rate Regime

Since 1990's, European currency crises,Mexico Bissau crises,East Asia currency crises,Argentina's currency crises has happened one after another. The high frequency of the currency crises raises once again the issue of how the central bank to maintain the fixed exchange rate regime. Especially, to the PBC, with the deep reform of the RMB exchange rate formation mechanism in 2005, a stable RMB exchange rate and the issue of its maintenance has become the main target of current exchange rate policy in China. The reputation mechanism of the exchange rate policy, has considered as the most convincing research idea about the current analyzing issue of the maintenance of the fixed exchange rate regime. Therefore, to the contemporary turbulence in the international financial field, from the perspective of time inconsistency with macroeconomic policy, researching the effectiveness of the reputation of the central bank and the exchange rate policy to the maintenance of the fixed exchange rate regime, which is not only a necessary theoretical study, but also a significant practical project.This paper includes the following six parts:The first chapter is the preface. Firstly, it gets the time consistency theory of the stable exchange rate policy--the reputation mechanism of the exchange rate policy after examining the issue of the maintenance of the fixed exchange rate regime. Then, it introduces the relevant background and the current study situation at home and abroad of this theory, and also puts forward the study significance and the research perspective of this paper.The second chapter makes an analysis of the basic effectiveness of the reputation mechanism of the exchange rate policy under the fixed exchange rate regime. Firstly, the paper gets the basic concept of the reputation of the exchange rate policy after examining the confidence of foreign exchange market, and considers the current policy of the stabilized exchange rate to be a macroeconomic policy with time inconsistency through deeply analyzing the time inconsistency theory of the economy policy and the three generations of the currency crises theory, and also policy commitments lacking the credibility, then points out that the reputation mechanism of the exchange rate policy is a feasible method to solve this problem. Secondly, it demonstrates the importance of establishing the reputation mechanism of the exchange rate policy from two aspects...