The Research Of Renminbi Equilibrium Exchange Rate Based On The BEER Model

To scientifically valuate whether the exchange rate of a country's money isreasonable, the key is to judge whether the real effective exchange rate coincides with the equilibrium real exchange rate. In an open economy, if the real effective exchangerate deviates from the equilibrium real exchange rate, namely the real exchange rate misalignment happens, this will influence the external and internal equilibrium of a country's economy and causes huge welfare cost.In the recent years, the literatures studying on the equilibrium real exchange rate of RMB have been welling up. These literatures generally estimate the real exchange rate misalignment of RMB, but most of them don't analyze theoretically and investigate empirically the real exchange rate misalignment of RMB and its economic effects from a long time series.In order to empirically research the real exchange rate misalignment of RMB and its economic effects, this paper collects the quarterly data about Chinese basic economic variables,uses the behavior equilibrium exchange rate model and the cointegration theory to calculate the quarterly state of the equilibrium real exchange rate and the real exchange rate misalignment of RMB from 1984 to 2005 as well as investigates the influences of the real exchange rate misalignment of RMB on export, import, trade balance, FDI and foreign exchange reserve by using the growth rate of Chinese main economic variables in the 22 years and compartmentalizing the misalignment into two stages'undervaluation and three stages'overvaluation. At last, according to the logic of a series of conclusions, the one policy enlightenments are acquired: to construct exchange rate target zones of RMB exchange rate target zones .And put forward a simple blue print of RMB exchange rate target zones for reference.