The RMB Globalization Research Based On The Framework Of The New Classical Economics

This paper intend to develop a new paradigm of currency globalization research based on the New Classical Economics. Inframarginal Analysis method was employed to study the Transaction Efficiency of RMB. Firstly, a model of endogenous monetary system was developed on the basis of Professionalization and work-division. secondly, the model was improved with the consideration of Transaction Efficiency, which extends the Chen’s model, and The relation between Transaction Efficiency and RMB globalization was obtained. Finally, an series of index was proposed, and the developed relationship as well as its rationality were verified empirically. Conclusions and some advices were obtained by comparing The Transaction efficiency and measuring indexes of RMB, US dollar and Euro.Currency globalization means a sovereign currency was widely accepted in international trades (Kenen,1983; Mundell,2002). Currency globalization has been a hot topic in the world, especially after the1980s, due to the impact of economy globalization, the expansion and the acceleration of international capital circulations. Subsequently, the international monetary system was greatly impacted by financial crisis. New international monetary systems, the functions and cost-benefits were studied by many researchers (kenen,1983; Hartmann,1988; Matsuyama, Kiyotki and Matsui,1993; Bayoumi and Eichengreen,1994; Rey,2001; Mundell,2002; Chinn and Franke,2005). Several new theories were proposed, such as the optimal currency area theory (Mundell,1960; Mckinnon,1969), the functional theory of monetary service production (Miles,1978), the currency demand for assets portfolio theory (King,1978), the marginal utility theory of currency demand (Bordo and Chondhri,1982), and the prevention of currency demand theory (Poloz,1986). These theories studied the mechanism, development and the impacts of currency globalization.With the rapid economic development and financial deregulation in China, the RMB are playing an increasing important role in the regional trades with local neighboring countries. If RMB can be a global currency, China will not only be benefited from international seigniorage, but also can improve its economic and bilateral relations with other countries, to maintain the stability of the domestic financial market, to ease the pressure of huge domestic foreign exchange reserves, and promote economic growth in the Asia-Pacific region. Furthermore, there is an increasing promotion of its international monetary system reform, the international monetary system needs to diversify the pattern of development, as well as the pressure of RMB appreciation since2005, China is facing an urgent requirement of the connotations of currency globalization a profound grasp of the law, the role of mechanisms for the process of global of the RMB-depth design. The RMB globalization study based on this not only has profound theoretical significance, but also has far-reaching practical significance to RMB an international provide more realistic basis for decision making, and promote the process of global of the RMB.