An Empirical Analysis Of Exchange Rate On The Impact Of China’s Economic Growth

With China’s growing economic strength, the development of foreign economy, as the link between the world economy—the exchange rate, has become a factor not to be ignored in the economic development of our country, with a population of1.3billion, the steady growth of the economy of non important, what will it do for me China’s economic growth, this is a very important topic. This paper intends to establish a consistent with China’s national conditions with statistical model to describe this effect. In this paper, the selection of Mundell-Fleming model of economic theory, on this basis, established the VAR model with GDP, interest rate, exchange rate of three variables. This paper first reviews the theory of exchange rate literature’s influence on economic growth, model type and the direction, as a reference basis for the model. Then analyzed the adaptability of Mundell-Fleming model of economic theory in China, based on the commodity market, money market, foreign exchange market three market equilibrium equation to select suitable economic variables--GDP, interest rate, exchange rate, in order to obtain more stable time series data, this paper uses simple extrapolation model, index smoothing and seasonal adjustment and other statistical methods for data processing. And then estimate the VAR model, test and causality test the stability, model number of lags of the model, through inspection, by using impulse response function, variance decomposition detail description of the dynamic characteristics of the model, results show that the exchange rate shock response, direction is negative, numerical value is small, the absolute value less than0.200. Exchange rate shock effect on our economi growth in the contribution rate of0%to6.51%, the effect of the minimum, almost no impact, from the beginning of the second response period, the contribution rate gradually become larger; the unit root test of the variables, the three variables are not stationary series, and has the same order, can do cointegration test, after there is no cointegration test, no long-term equilibrium relationship between them are described. The study shows:no matter in the long run, but in the short term, the exchange rate will not cause material adverse effect on China’s economic growth, exchange rate elasticity coefficient of GDP is only0.049, contribution to economic growth rate up to no more than6.51%, that is to say, the exchange rate is not the main factor of economic growth in China influence, will not have an impact on the economic growth in china.