The Influence Of Tradable Goods’ Prices On RMB Real Exchange Rate Fluctuations

Economy plays an important role in the interests of countries and regions,changes by the outside contacts. Meanwhile, trade is an important medium of foreign economic links. Tradable goods and non-tradable goods have a strong effect on price, industrial structure and macroeconomic policy. The existence of tradable goods and non-tradable goods connect the interests of different countries and regions.Based on open economy, the products is divided into tradable goods and non-tradable goods in this paper, and contact with RMB real exchange rate to research the impact of the price of tradable goods and non-tradable goods. Using the sstatistical-aanalysis and empirical-aanalysis Method, I conclude that the price of tradable goods has a significant impact of RMB real exchange rate.In part1expound the research background and significance, explain the relevant definition, summarize research results at home and abroad, meanwhile point out the research methods and innovation of this thesis. This paper shows that the research of the RMB exchange rate meets the requirements of the times. The recently published literatures are reviewed, to prove that the economy growth, trade between countries, currency system and Inflation affect the real exchange rate, but the price of tradable goods plays a leading role.In part2,1analyzee the theory show how the price of tradable goods affect the real exchange rate. This part points that the reform, the balance of international payments, economy growth, labor productivity and difference in interest rates are main factors. Meanwhile the price of tradable goods’effect on the real exchange rate is studied from purchasing power parity(PPP)and dependent economy, and proved that both PPP’s real exchange rate and dependent economy’s real exchange rate are closely related to the price movements of tradable goods.In part3, based on econometrics, by using variance method and variance decomposition method, the thesis reduces the RMB real exchange rate and draw the conclusion that the price of tradable goods plays a greater impact on the RMB real exchange than the price of non tradable goods.In part4, the thesis chose China and other ten countries to confirm the conclusions in part3.In part5, political suggestion is advanced:China should pay more attention to the impact that the price of tradable goods play on the RMB real exchange and rationally readjust the import-export trade structure to make sure the price of tradable goods heading in the right direction.