The Comparative Labor Productivity And Real Exchange Rate Of RMB

Real exchange rate of RMB has been a focus since 1990s,especially the financial crisis of southestern Asia.Since 2002 and 2003,The saying about appreciation of RMB has increasingly became more.Japan and America declared that appreciation of RMB is right.During the period,exchange rate of RMB faces broad appreciation pressure.On 21th of July,2005,People’s bank of China declared:the exchange ratio of America and China has been adjusted to 1:8.11,that is to say,exchange rate of RMB has increased by 2%.China is at transit time of economy now.At such a special stage of development,the trend of exchange rate leads people exactly explore the factors which exchange rate of RMB depends on.China’s tradable sector relative to non-tradable sector has been rising relative labor productivity,which impacts on the relative prices of the tradable sector and non-tradable sector.The two departments relative labor productivity significantly impact on relative prices,in line with Balassa Samuelson effect of a theory Described features.Further research shows that the two departments and U.S. price level relative productivity differences between the two countries and the RMB significant effect on the real exchange rate,China’s trade sector’s labor productivity relative to the rapid growth of non-trade sector,will bring RMB real exchange rate appreciation.This also from the perspective of the productivity RMB appreciation pressure on the current issues provides a good theoretical and empirical basis.This paper has five chapters.The first part is about the real exchange rate determination mechanism outlined in literature,and analyzes the theory of exchange rate B-S Effects.The second chapter analyzes including purchasing power parity,interest rate parity, Balassa-Samuelson effect of these three real exchange rate determination,provides the basis of the RMB exchange rate.The third chapter analyzes and discusses the variables used in this article.Chapter empirical research on China’s Balassa- Samuelson effect,And draw Balassa-Samuelson effect significant role in our conclusions,you can use it to explain the current from the supply side of the problem facing the pressure of RMB appreciation.The fifth chapter is closing,this overview summarizes the arguments and make recommendations.