The Analysis Of The Dynamic Relationship Between Exchange Rate Volatility And Trade Balance Of Shandong

In recent years, the RMB exchange rate has been paid more attention, for this problem, different people have different views. Since July 2005, China began to implement floating exchange rate system that is based on market supply and demand, referred to a basket of currencies and is managed by people. The fluctuations of RMB exchange rate will be increased, and shows a ascendant trend. Traditional theory holds that the rise to exchange rate will be decreased to foreign trade, make exports fell.However, by theoretical or empirical analysis, some scholars think that the moderate rise to exchange rate will be increased to china's foreign trade.More literatures will be researched on fluctuations of exchange rate impacted on china's foreign trade.However,little literatures will be studied on a certain area or province.As a shandong province that its foreign trade is on the top of national trade, how are fluctuations of exchange rate influenced on shandong? The appreciation of RMB was promoted the trade balance or obstacled to the trade balance in shandong province? The topic is worth with researching, especially in the background that shandong is focusing on creating a blue peninsula economic region, and Yellow River delta region also rise as a national strategyFrom a view of technical, this paper analyzed the dynamic relationship between the fluctuations of exchange rate and shandong trade balance by VAR model. This article is divided into six parts, the first part is the introduction, which is mainly elaborated on the paper that is focused on the background, purpose and meaning, then introduced the idea and method, and finally showed the innovation and shortcomings:The second part is a literature review, which introduces domestic and international situation that is research on the relationship beween the fluctuations of exchange rate and the trade balance:The third part is the exchange rate theories, whicin is mainly introduced several theories of the exchange rate determination, and factors that influence on exchange rate fluctuations;The fourth part is a developmengt situaton of shandong foreign trade, which is mainly introduced the development of shandong trade balance in recent years and the national position that shandong stands: The fifth part analyzed the dynamic relationship between the fluctuations of the exchange rate and shandong trade balance, which is mainly introduced VAR model and then used econometric methods to analyzed the dynamic relaionship among fluctuations exchange rate,shandong export, shandong import and shandong net exports respectively:The sixth is conclusion, through theoretical analysis and empirical analysis we can approximatly simulate the relationship beween fluctuations of exchange rate and shandong trade balance, in view of this, we can take better measures on the response of exchange rate shocks to shandong trade balance.