Rmb Equilibrium Real Exchange Rate Of The Exchange Rate System Reform

Exchange rate is one of the core issues in financial area. The research on equilibrium exchange rate comes out to judge if an exchange rate level is reasonable or not and make the decision on macroeconomic policy. The study of equilibrium exchange rate has very important actual implication.This paper analyzes and compares with the existing theory concerning equilibrium exchange rate, Considering China's actual situation after innovation of exchange rate, this paper makes empirical analysis of RMB's equilibrium exchange rate on the basis of ERER extension model In terms of seasonal data since 1994. Adopting ADF unit-root test, VEC model, H-P filter method, and Johansen maximum likelihood estimate in analyzing and calculating process, this paper eventually measures the ability of RMB modifying misalignment by itself and RMB's equilibrium exchange rate. Based on the result of empirical analysis, The paper calculates RMB's equilibrium exchange rate after innovation of exchange rate combining with the factors' influence besides model. Then the paper analyzes misalignment of RMB's exchange rate and its main cause. Finally, the paper gives the motheds of solving RMB's misalignment, and considers the corresponding policy advice on the innovation of exchange rate system.