The Formation Mechanism Of The Bubble Economy Under The Appreciation Of The RMB And Macro-control

In recent years, the appreciation of RMB has become the focus of worldwide attention. Because of the good expected of RMB, our country attracts foreign capital, brings the current account surplus. Growing foreign exchange reserves, surge of hot money into the stock market one after another and Housing Real estate market. In turn it will boost the flow of domestic capital to be also a large number of them. China emerges the "bubble economy" Which is represented by the real estate market, sharp fluctuations in the stock market as .As a result, the research on the formation mechanism of the bubble economy under the revaluation of the RMB has important practical significance.In this paper, considering the appreciation of the RMB, we use the country 1998-2008 actual use of foreign investment in the amount of real estate price index for the quarter and use the data model to correct the error. We also make a Granger causality test to China's real estate prices and international capital flows and the relationship between them. The results show that in the short term, real estate prices attract the inflow of foreign capital; in the long run, the inflow of foreign capital to China's housing prices had an impact. At this stage, to control the inflow of foreign capital over the real estate market is conducive to maintaining China's real estate price stability.After the analysis of international capital impact on the real estate industry, we continue to use the 2005-2008 national change in the RMB exchange rate index, the Shanghai Composite Index, such as the establishment of monthly data to correct the error model, use the Granger Causality Test to make a empirical test on the relationship between the China's foreign exchange market and the stock markets .We conclude that when the rate of the RMB exchange rate appreciates, the present stock market prospers; the RMB exchange rate stable has depressed the stock market. Finally, according to the results of empirical analysis on the appreciation of the RMB, we study the background of the bubble economy burst and the reasons for, and put forward relevant proposals.