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Impact Of Exchange Rate's Changes On Domestic Price Level

Posted on:2009-10-12Degree:MasterType:Thesis
Country:ChinaCandidate:L HongFull Text:PDF
GTID:2189360272489932Subject:World economy
Abstract/Summary:PDF Full Text Request
As external value and internal value of money, there is a compact relationship between currency's exchange rate and domestic price; therefore, research in this relationship is an important subject in international economics.In the 1970s, the development of international exchange rate system is the transmission from fixed exchange rate to floating exchange rate, Japanese Yen rise continuously, especially after Plaza Announcement, exchange rate of Yen to dollar rise quickly. To this history, most scholars focus on the relationship between exchange rate of Yen and volume of trade directly. For a long time, few researches have been found in the impact of exchange rate of Yen to Japanese domestic price level.Consider for the fact, the thesis will select related data form 1973-2002 about exchange rate of Japanese Yen and price level, introduce the history and reasons of exchange rate of Yen to dollar, describe approximate trend in Japanese price fluctuation at this stage, then apply Vector Auto-regression model, impulse response function and variance decomposition to analyze the influencing relations as follows: how changes in exchange rate of Japanese influence import price index, producer price index and consumer price index. Finally, process data with Eviews, and reach the conclusion that exchange rate of Yen impact domestic price level significantly.Discussing on transmission effect about changes in exchange rate of Yen to price level from the angle of the exchange rate pass-through, is the thesis's innovative points, it also has a referential significance in the argument that should there be appreciation of RMB and how to perfect the formation mechanism of RMB exchange rate. The research conclusions provide experience for china to draw from. It will provide reference as follows: adopting a correct attitude towards advantages and disadvantages of the appreciation of RMB; constitute monetary policy and exchange rate policy; remain stability of the exchange rate of RMB and domestic price level.
Keywords/Search Tags:Changes in Exchange Rate, Domestic Price Level, Japan
PDF Full Text Request
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