| China has experienced from the closed economy to open economy in the earth-shaking changes during 30 years since Reform and Opening-up. In the closed economy period, China focused more attention on the internal balance. With opening up increasing, the importance of external balance is growing. The external balance make an increasing impact on Chinese economy. Exchange rate as a key factor in Connecting domestic market and foreign market, its importance can not be ignored. Now floating exchange rate is practiced in most countries and exchange rate fluctuates frequently. Therefore, the measurement and analysis of the equilibrium exchange rate have become an indispensable field of international finance research.In addition, as Chinese economic development and many reforms of exchange rate system, the RMB exchange rate has been under upward pressure especially after the 2005 exchange rate reform. TRMB exchange rate has become the focus of global concern.Some scholars believe that the RMB is underestimated seriously and some researchers think that the RMB has not underestimate. So the equilibrium exchange rate has become a key to solve the problem that the RMB exchange rate is overvalued or undervalued.The starting of this paper is the basic definitions of exchange rate, real exchange rate, real effective exchange rate, equilibrium exchange rate and so on. And then the equilibrium exchange rate theories of the West are introduced. Equilibrium exchange rate theories are divided into two parts:one is structural model, and the other is the data model. Structural model on equilibrium exchange rate estimated mostly based on the mature market economy, and this is not appropriate to China. Because using this method to measure the equilibrium exchange rate in China is lack of strong support. The FEER, NATREX as the representative of general equilibrium and partial equilibrium analysis belong to structural model. The characteristics of the data itself is the starting point of Data model and it is the basis of studying long-term equilibrium relationship between variables, But Data model ignores the dynamic role of the relevant variables for the real exchange rate. BEER, ERER as the representative of the simple single equation cointegration model belongs to the data model. For Chinese current economic situation and the actual situation of Exchange market, I think that the data model is more practical for China and it can measure the RMB equilibrium exchange rate better.The bases of this paper are the behavioral equilibrium exchange rate theory BEER and the background of Chinese current conditions. labor productivity, openness, government spending, net foreign assets, the terms of trade as the basic economic factors and the unit root test, VAR model, Johansen cointegration test, VEC correction model, HP filter as measurement methods to analyze the annual data of 1981-2010.On basis of the calculation of the RMB equilibrium exchange rate,this paper make the further estimate of exchange rate misalignment and analyzes the causes of the disorders of the RMB effective exchange rate.The main logical framework of this paper:Introduction of Western theory of the equilibrium exchange rateâ†'The use of equilibrium exchange rate theory to establish modern equilibrium exchange rate model of RMBâ†'estimation of RMB equilibrium exchange rateâ†'determination and analysis of the disorders of equilibrium exchange rateâ†'full summary and policy recommendations. On the basis of this logical framework, the paper is divided into six chapters, and the research contents can be stated as follows:Chapterâ… , Introduction. It is Including the background and significance of research question, summary of previous literature and research findings, outlining the study content and structure and Finally indication the innovation of this paper.Chapterâ…¡, mainly describing the history reform and the status of our country's exchange rate system. And evolution of the RMB exchange rate is divided into 3 phases.Chapterâ…¢, mainly introducing the theory and related concepts of equilibrium exchange rate, including introducing the western classical decision theory namely theory of purchasing power parity, the theory of fundamental equilibrium exchange rates (FEER), theory of natural real exchange rates (NATREX), theory of behavioural equilibrium exchange rates (BEER), theory of equilibrium real exchange rates (ERER)Chapterâ…£, the empirical test. analyzing the basic economic factors which affect the long-term equilibrium exchange rate of RMB through ADF test, Var model, Johansen cointegration test, VEC correction model, impulse response, HP filtering.Chapterâ…¤, based on the last chapter, studying the misalignment of RMB exchange rate. Estimate the misalignment degree of RMB exchange rate In the 1981-2010,and analyze the reasons for disorder.Chapterâ…¥, the article's main findings and key policy recommendationsThe main conclusions can be stated as follows:â‘ of empirical research can draw the results:Labor productivity, government spending, net foreign assets, openness, terms of trade are the fundamentals which determine long-run equilibrium exchange rate. Labor productivity, government spending, net foreign assets of the terms of trade have a positive influence on the equilibrium exchange rate, and openness has the reverse effect on the equilibrium exchange rate.â‘¡In recent years, the RMB real exchange rate has been in a appreciation channel. This Mainly due to the increase of labor productivity, especially rapid increase in the trade sector and in net foreign assets. The current of China sustains surplus and accumulates a large amount of foreign currency assets. Various reasons show that the trend of RMB appreciation is inevitable.Our government and other economic departments should prepare for the appreciation of the RMB adequately.â‘¢We can see from the VEC correction model that RMB real exchange rate has some degree of self-repair mechanism. But self-adjustment of exchange rate is slow, so this need urgently for the authorities to take measures to rectify the situation.â‘£In recent years, there has been a trade deficit of foreign trade in the United States. America require China to revalue its currency based on the data China's trade surplus and the appreciation range is 20% to 40%,but this is not reasonable.The reason for China's trade surplus with the United States is a great shift of global manufacturing under the trend of globalization. Dollar standard will inevitably lead to expansion of the virtual economy, make the imbalance of excessive consumption to achieve "extreme excessive" degree, and create a global export expansion to absorb an enormous consumer market, so in this context that China's trade surplus with the United States is a normal trade phenomenon.policy recommendations can be stated as follows:(1) continuously improve the RMB exchange rate regimeâ‘ Increasing the range of the RMB exchange rate flexibilityâ‘¡developing the basis of the RMB exchange rate decisionâ‘¢improving the foreign exchange market furtherâ‘£Mandatory settlement system of foreign exchange should be gradually transformed into will settlement system of foreign exchange(2) further improving the financial markets and the level of financial development in Chinaâ‘ developing capital markets continuouslyâ‘¡Promoting the reform of market-oriented interest rateâ‘¢making constant financial innovation and diversification of financial instruments.Innovations of this paper are as follows:â‘ updating the time interval of study and time span is large.â‘¡Selecting several factors which have an important influence as variables. |
PDF Full Text Request