Research On Economic Effect Of RMB Real Exchange Rate Misalignment

In recent years, due to the dual pressures of the internal and external economic,China’s RMB exchange rate is appreciating.The RMB appreciation has gradually become the focus of attention of the scholars. How much is the space of the appreciation of the RMB exchange rate? Whether the rate is disordered? And how to adjust these problems? These problems are a test of our scholars, as well as a test of China’s monetary authorities. RMB exchange rate misalignment provide useful help for the improvement of the RMB exchange rate regime, as well as for the RMB freely convertible for capital projects, and enrich the literature of exchange rate misalignment, and help people better understand the economic variables of the RMB exchange rate.The first charpter elaborates the background and significance of researching RMB exchange rate misalignment conditions.And review the literature about estimating of the equilibrium exchange rate and the economic effects due to the misalignment of the internal and external.Further drawn the reason to use to study the RMB equilibrium exchange rate, laying the theoretical foundation for the next article.The second charpter selects six variables,inclued the RMB real effective exchange rate, labor productivity, and the openness, the terms of trade, the broad money supply and the net foreign assets,then use the behavioral equilibrium exchange rate model to analysis the equilibrium equation of the RMB exchange rate.The third charpter estimates the extent of the RMB exchange rate misalignment, points out that the real effective exchange rate of RMB is overvalued. According to the calculation results, analysizes the impact which undervalued exchange rate haved on China’s import and export from the perspectives of both theoretical and empirical,and the impact which overvalued exchange rates haved on employment and economic growth.The fourth charpter proposes the policy recommendations to keep the RMB stable based on the analysis of the first three chapters, including to increase the flexibility of the RMB exchange rate, expand the range of the RMB exchange rate fluctuations, promote the convertibility of the RMB capital projects gradually, establish the exchange rate policy coordination mechanisms, accelerate the transformation of economic growth mode, provides useful reference and basis to implement the relevant measures for our government and monetary authorities.