Research Of The Mechanism Of RMB Exchange Rate From The Perspective Of Optimal Intertemporal Approcach

Since the start of the exchange rate system reform since July 2005 the RMB exchange rate, China’s government has relaxed controls on the RMB exchange rate and the volatility of the RMB exchange rate increases, especially nearly two years to the RMB exchange rate change the two-way volatility in long-term unilateral appreciation trend. At the same time, China began the economic development focus from exports to promote economic shift to expand domestic demand, regardless of the production process and consumption sectors, coupled with financial sector participation, exchange rate fluctuations of the causes are becoming more and more complex. And the existing exchange rate decision theory, can not fully explain the new situation of exchange rate formation. The from a new perspective, that is, the cross period optimal consumption perspective explore the decision mechanism of the RMB exchange rate and explore residents(or enterprise) cross the consumption changes, and discuss the organic connection between financial asset price and exchange rate changes in the consumption- the optimal investment decision, has important significance on the theoretical and empirical.In this paper, the decision mechanism of the exchange rate of RMB is discussed by constructing the DSGE model under the open economy. Based on the DSGE model constructed by Obstfeld and Rogoff, it contains four main parts: family, enterprise, government and finance department. As the family department in its duration is constrained by the budget constraint and the utility function, the optimal dynamic behavior equation of the Lagrange equation can be obtained. Manufacturers can be specifically divided into the capital producer, wholesale producers and retailers. Because of the information asymmetry, so need to pay to the bank financing costs, labor employment of the household sector production, reach the final production status; retailers by buying wholesale goods producers of consumer goods part, differentiated packaging, re pricing sales. Government departments responsible for the formulation of monetary and fiscal policies to maintain macroeconomic balance. The financial sector through the lending to help families and manufacturers to smooth their cross period of production and consumption. This paper selects the monthly data from 2000 to 2014-15 years has carried on the empirical analysis, in the stochastic dynamic equilibrium model, the changes of exchange rate volatility factor impact on the consumer more fit our country actual situation, and found that there is not a paradox of exchange rate and consumption in our country for a long time in the environment, and the RMB exchange rate appreciation in the long run plays a role in promoting consumption. But no obvious influence on the RMB exchange rate fluctuation of residents consumption; financial assets as residents of asset allocation of a part, is increasing in importance. In this paper, the introduction of risk assets on the exchange rate influence, from one side reflect the resident’s intertemporal optimal consumption and investment strategy choice is how to influence the exchange rate determination; finally, according to the results of empirical analysis proposed in the background of a two-way fluctuation of the RMB exchange rate, the government departments should use what macroeconomic measures to stabilize the economy.