An Empirical Study Of The Equilibrium Exchange Rate Of Rmb

This dissertation is a study on the equilibrium real exchange rate of RMB. And its objective is to build the empirical model of equilibrium real exchange rate of RMB, estimate the exchange rate misalignment and analyze the reason of the misalignment in China, which covers the period from 1980 to 2004.The dissertation consists of 4 chapters, and the contents of each are as follows:Chapter one dwells on the evolvement process of the exchange rate of RMB and generally divides it into three different periods as follows:①the exchange rate of RMB in planned economy system,②the exchange rate of RMB in the reform of economy system,and③the exchange rate of RMB in the transition to market exchange rate.Chapter two systematically describes two kinds of western classic theories about the determination of exchange rate (Purchasing Power Parity, PPP and Interest Rate Parity, IRP), and further analyzes the adaptability of the two theories in China by the empirical methods. The research shows that neither PPP nor IRP can well explain the behavior of exchange rate of RMB, which covers the period from 1980 to 2004.Chapter three dwells on two kinds of modern equilibrium theories about determination of exchange rate (Fundamental Equilibrium Exchange Rate, FEER and Behavioral Equilibrium Exchange Rate, BEER). Compared and contrasted the two methods, we find that BEER is more realistic than FEER in that it conquers the default of"idealization"in FEER by using reduced-form equation to estimate the equilibrium exchange rate. Consequently, this dissertation chooses to use BEER in building the econometric model of equilibrium exchange rate of RMB.