The Empirical Study On Equilibrium Real Exchange Rate Of RMB

In recent years, the international debate on the equilibrium level of the real exchange rate of the RMB is becoming increasingly fierce, in this context; further strengthening of the RMB equilibrium exchange rate research has become more important. Firstly, since2002, western countries put pressure on our country to force the appreciation of RMB, for the excuse of the RMB exchange rate underestimated causing imbalances in the international economic, studying RMB equilibrium exchange rate can provide theoretical support for this purpose; Secondly, the study of RMB equilibrium exchange rate can provide an important basis for China in international exchange rate coordination and can better understand the regulatory standards of the IMF on the exchange rate of the world to create better international environment for China’s economic development; Finally, the study on RMB equilibrium exchange rate can provide important reference for the Chinese government to implement the corresponding fiscal policy and monetary policy, can improve the effectiveness of the People’s Bank of China in formulating economic policy and forward-looking by understanding the equilibrium exchange rate to avoid major misjudgment of financial macro-control on the exchange rate issue.Based on the development and the content of equilibrium real exchange rate theory, especially the study of exchange rate theory model in developing countries, the essay carries on the empirical research on the basis of the use of ERER model of the factors affecting the RMB equilibrium exchange rate. Focusing on analysis of the various economic fundamentals of the equilibrium exchange rate of RMB to further calculated the equilibrium exchange rate of the RMB, the essay analysis the content and causes of misalignment, and finally discusses the impacts of exchange rate misalignment on China’s economic development, and gives feasibility recommendations to deal with these impacts. Come to the following conclusions:money supply and openness affecting the long-term exchange rate is relatively bigger, labor productivity and terms of trade effect is relatively smaller; China’s exchange rate policy cannot response rapidly according to the adjustment of macroeconomic; in the first quarter of1994to the fourth quarter of2012range, the real exchange rate of RMB went through four underestimated stages and four overestimated stages. To solve the above problem, the essay summarizes several methods that can effectively resolve the RMB exchange rate misalignment problem:we should continue to improve the RMB exchange rate formation mechanism, and constantly optimize the size and structure of foreign exchange reserves, adjust the industrial structure and the structure of export trade, gradually realize the progress of RMB capital exchange and the promotion of regional economic integration.