The Analysis Of Growth Path And Effect That Rmb Exchange Rate Does On Economic

Since the1990s, China's economy has maintained a fast level of growth. In2010, GDP has exceeded the Japan's, becoming the world's second largest economy, just behind the USA. Since July2005RMB exchange rate reform, RMB has constantly appreciated, which accumulates to23%. Now, the pressure that causes RMB to appreciate is still existed. The influence that constant appreciation of RMB does on the aspects of economy is becoming more and more remarkable, economy continues to grow rapidly is under greater pressure. Therefore, this paper will deeply study the RMB exchange rate and per capita GDP growth, which will contribute to an overall research on the effecting ways and extent that RMB exchange rate does on economic growth. Meanwhile when analysis other factors that affects economic growth, it will do an important theoretical and practical significance on easing the impact of RMB appreciation effect.This paper uses the exchange rate, GDP and related economic indicators of1981-2009from PRC State Statistical Yearbook, based on the theory several subjects, such as Macroeconomic, Econometrics, and the ways of qualitative and quantitative, normative and empirical, analytical data and chart, to fully analyze the pathway and extent that the exchange rate does on economic. Besides it will more comprehensive and science reflects the economic growth effects of exchange rate. Study is divided into two blocks:first, analysis the way that exchange rate does on economic growth. From the means which exchange rate does on consumption, investment, imports, exports, in order to conclude the specific action. Second, the economic growth effects of exchange rate. Build the regression model of economic growth with consumption, investment, import and export and determine the different factors impact on economic growth, combined with the effect RMB exchange rate does on these four factors, In order to comprehensively analysis the effect exchange rate does on the economic growth. Third, the hysteresis effects that exchange rate does on consumption, investment, import and export.Empirical studies have shown:the appreciation of RMB exchange rate works through the wealth effect, income effect to stimulate consumption; the appreciation of RMB exchange rate affects the cost and income of investment, which increases the social fixed assets investment; the appreciation of RMB exchange rate reduces the relative price of imported goods, improves imported consumer demand, so total imports increases; the appreciation of RMB exchange rate inhibits growth of total exports by changing the corporate labor costs, raw material and imported raw materials cost, export earnings. RMB exchange rate has a two phases lag on Consumption and investment, a one phase lag on export and import. Consumption, investment, exports does a significant positive effect on per capita GDP growth, while imports do a negative effect. Comprehensive analysis shows that appreciation of RMB exchange rate does a significant negative impact on economic growth. The effect degree that exchange rate does on economic growth has been devided into four levels, the first is export, the second is investment, the third is import, the forth is consumption.