Study On The Dynamic Mechanism Of Currency Internationalization

After the financial crisis in 2008, each country’s comprehensive national strength occurred one after another change, the world economy towards the direction of diversification, the pattern of the international monetary system is undergoing radical changes.The higher the degree of a country’s currency, which shares more international interest. it has always been our wish to explore the issue for the International Monetary reign how they are to promote the international and their mechanism of action is how; By summarizing important international currency conditions, provide a reference for the smooth and effective to promote the yuan to the world and internationalization of the RMB. To examine these issues, this paper use the theoretical and empirical analysis of currency internationalization dynamic mechanism to exposition and argumentation.This article stars from the relevant international currency basis theory for a more systematic analysis:In order to pave the way for the later research, we collect the literature on the conditions and the path formed of international monetary, on the basis of the initial introduction of the definition and functions of international currency. Followed by the international currency dynamic factors, theoretical dynamic mechanism of the conduction path analysis, this article summarized in common currency internationalization process, learn some international currency stricken lessons for empirical analysis later laid foundation, but also to provide a reference for the internationalization of RMB.Based on the above theory, this article using the share of the dollar, euro, pound, yen these four currencies in the global foreign exchange reserves as an official currency proxy for the degree of internationalization.Through the way of principal component analysis (PCA) and nonlinear panel smooth Transition Regression (PSTR) to empirical research on the dynamic mechanism of the International Monetary, and to estimate the theoretical value of the RMB international level on this basis.Studies have shown that international monetary mechanism has asymmetric power, the main dynamic factors are economic development, financial markets and currency stability; constrained by unbalanced economic structure, low-value chain, trade structure and low added value and fragility of the financial system, current level of internationalization of the RMB is overall lower. Finally, the article gives policy recommendations to promote the internationalization of the RMB,It includes the following:in the context of protection of domestic steady economic development, effectively and steadily promoting domestic financial reform, and actively promoting the reform of the international monetary system.