Rmb Real Exchange Rate Fluctuations And The Rmb Exchange Rate Adjustment Of China's Macroeconomic Impact Studies

Since 2002, the RMB exchange rate question becomes the focal point once more (continued in 1997 Asian finance crisis). Some countries and research organization think that the RMB currency value is seriously underestimated and request RMB to definite its value again. Our government repeatedly emphasizes that we must maintain the stability of RMB currency value, and appreciate 2% on July 22nd, 2005. Many domestic and foreign experts conducted research on the RMB exchange rate question, from the rationality of the RMB exchange rate, the RMB exchange rate adjustment plan, to the reformation of RMB exchange rate mechanism and so on. This article cares more about the following two issues: the first is that whether the RMB exchange rate is underestimated and how much? Although the domestic and foreign experts had conducted massive research, the research technique and the data still can be discussed further. The second is that to what extent the economy is affected if the RMB appreciates. The literature on this topic is less, but the research on this will provide the quantitative basis for the current decision.This article first constructs an equilibrium exchange rate model to estimate the equilibrium actual exchange rate of RMB as well as the deviation of the actual exchange rate, and carries on the analysis to the volatility of the actual exchange rate. The improvement of the equilibrium exchange rate model lies in, first a more widespread aggregation of economic variables is contained, second the structure variation is considered, third the new data from the 1st quarter of 1990 to the 2nd quarter of 2005 are used to estimate the model. Afterwards, this article constructed a simultaneous equations model contains the actual effective exchange rate, GDP, the fixed asset investment, consumption, exportation, importation and so on to simulate the influence of the appreciation of RMB. The main conclusions are as follows:1. The RMB equilibrium actual exchange rate can be expressed as a function of the following economy variables: the degree of opening, the trade condition, the proportion of government's expenditure to GDP, the proportion of the tax revenue to GDP, the total export and so on.2.The improvement of the trade condition can make the equilibrium actual exchange rate rise. The advancement of the degree of opening causes the equilibrium actual exchange rate drop. The increase of the government's expenditure and the tax revenue cause the equilibrium actual exchange rate rise. The...