Empirical Research On Rmb Exchange Rate Target Zone

On July 21,2005,China officially launched the RMB exchange rate reform,China began to implement based on market supply and demand,with reference to a basket of currencies, a managed floating exchange rate systerm.In recent years, the reform of the RMB exchange rate mechanism has got expected result and plays a positive role to the reform of economics.The reform of RMB exchange rate in 2005-2008 makes the exchange rate rising unilaterally,until 2008,the year gobal financial crisis has suspended a revaluation of the pace.In the after 2 years,the process of pegged to the dollar ouccer again,until 2010june 19,the people's bank of china announced we will advance the reform of RMB exchange rate furtherly to strengthen the elasticity of RMB exchange rate,which can be defined the second reform of RMB exchange rate.The second reform of RMB exchange rate is refered to be the impetus of achieving RMB convertible,which casuing me to realize the interest to research the floating rate system.Through the analysis of the present in the economic development,china could not immediately executes floating exchange rate,there must be a gradual transition to the realization of the adaptive floating exchange rate system,but in the transition period,the exchange rate target zone system will be a more reasonable system.Under the background of the reaserch on top,the purpose of this study is to use the exchange rate target zone theory and the sticky price theory, combined with the Krugman model of exchange rate target zone and the Dornbush the sticky price monetary model, leads to Miller and Weller's sticky price exchange rate target zone model, and then take Sutherland's power series of sticky price exchange rate target zone model was solved, in order to achieve the RMB and the dollar's exchange rate target zone to the establishment of empirical analysis and the results used to support China's exchange rate target zone system was established.The specific content of this order will be as follows:The first part is the preface of the study,mainly expounds the background and significance to research topics in china,and we should choose exchange rate target zone system as the exchange rate system we choose in the transition period when we advance the reform of RMB exchange rate.The second part elaborate Krugman exchange rate target zone theory,and through some empirical test model made by other scholars,we can get some defects of the Krugman exchange rate target zone theory,so Krugman exchange rate target zone theory were rejected by empirical experience,and the theory need to be further perfected.The third part introduce Dornbush sticky-price monetary model analysis and reveals this analysis model can perfect the Krugman exchange rate target zone theory.The forth part leads the Dornbush sticky-price monetary model analysis into the Krugman exchange rate target zone theory to raise the Miller and Weller sticky-price exchange rate target zone model,the new theory can be more accord with china's reality,not only can explain the overshoot rate,but also can better reflect the characteristic of the managed floating exchange rate system.The fifth part introduce the method of power-series,which introduced by Sutherland.Under this method,we make an quantitative analysis of dollar-RMB exchange rate on the sample date from 1990-2008,and draw a conclution:the equilibrium exchange rate under the exchange rate target zone is between 8.0429 and8.4719,the range of target zone can be set within±(2%-3%).The sisth part elaborates the reality of quantitative analysis result and the practical suggestions of the actual implementation,and we adopt the double zone idea of Cheng siwei to establish a RMB exchange rate target zone which contains the soft and stiff target zone.Research methods adopted in this paper is mainly Eviews and Crystal ball through quantitative analysis software applications, selected samples of the ADF test, OLS regression and the fitting of random variables to the empirical analysis, in addition, through a number of Chart data analysis and summarized to some extent, obtained a description of some phenomenon. Innovation of this paper is the time of the sample date is more recently, compared with similar research papers we have choose more recently data sources and we have different understanding in model.T he inadequacies of this study is that we have no enough understanding of the model, while in the process of empirical analysis, some method applied unfamiliarly.