Study On Dynamic Effects Of RMB Exchange Rate Fluctuations And Excess Issue Currency On China’s Inflation

In recent years, by a scale of such factors:our country economy rapid growthexpanded trade surplus and rapid expansion of foreign exchange reserves,Added thewestern developed countries,with their own problems keep crisis,economic growthweakness.For the political vote, the politicians started to try their best to,and on everypossible way,in different occasions to convey the requirement of the appreciation ofthe RMB.In this background of domestic and overseas,the pressure of RMB’beappreciation’is higher and higher.At the same time,China convert the currency policyfrequently, sometimes loose, sometimes squeeze, inflation hanging in the our countryeconomy as a ghost.Thus,in the Chinese academic circles there raised up two kinds of discussion aboutinflation:The first， China’s inflation is mainly caused by over excess issuecurrency;The second，the RMB rise sharply, expand the range of our country torestrain inflation have obvious effect.The above ideas have scientific basis or not,canget the empirical support or not?The RMB exchange rate,and the RMB exchange ratevolatility and the level of our country’s currency super hair inflation can produce whatkind of impact? Japan,has similar situation to our country once,The wrong policiestaken by them and the resulting Japan’s long-term economic stagnationconsequences.What kind of reference and enlightenment to our country will makesense?The nations ties more and more close today by economic.How could therelated functional departments of our country use the exchange rate policy andmonetary policy and to prevent,and control the inflation?To answer thesequestions,this paper first use of the regulating research methods of analysis andrelated to the study of the theory introduces and comb by the paper,in the name of ourcountry after the effective exchange rate,the money the hair and the price levelchanges in the system is reviewed.Then the empirical study of this chapter, theselection of LNEER, VNEER, LMGDP and LCPI four variables, based on January1996to June2011monthly data,and by using the EGARCH model,VAR modeling analysis, the results showed that the hair is a cause of China currency of the cause ofthis inflation, but the main;The appreciation of the renminbi,expand the range of ourcountry to restrain inflation effective,but the effect is limited.Finally,according to theconclusion of the empirical research and reference once and our country has similarsituation of Japan’s experience puts forward relevant constructive Suggestions.