Research On The Factors Affecting Purchasing Power Parity In The "Belt And Road" Countries

With the development of economic globalization,exchanges and trade between countries have become more frequent.In the context of this kind of international exchanges and friendly exchanges,China has put forward the “Belt and Road Initiative” in 2013,and the 19 th National Congress also recommended It is necessary to write the construction of the Belt and Road Into the Party Constitution,indicating that China attaches importance to and strengthens trade and friendly exchanges with countries around the world.Then,in the process of international exchange,we need a comparison of the economic strength between countries.In the national economic accounting,the economic indicator of GDP is usually used to measure the economic strength of a country,but because different countries have different monetary units.When conducting international comparisons,it is often necessary to convert them into uniform units for comparison.The method we are familiar with is the exchange rate method,which converts the currencies of different countries through exchange rates,but the exchange rate method has some fatal shortcomings,such as the use of exchange rates.The theory of law is inconsistent with the actual situation,and the exchange rate law requires a high degree of marketization of the products of the country.These characteristics make the conversion of the exchange rate method too high or too low to estimate the economic situation of a country.In order to make up for the shortcomings of the exchange rate law,Cassel proposed a purchasing power parity method,which is a method of adjusting GDP and then making international comparisons by constructing and estimating the purchasing power parity(PPP)index of each country.Later,this method was conducted at the United Nations.Applicable in(ICP),this purchasing power parity method has also received attention and recognition from more and more international organizations.Although this method is more reasonable and more realistic,it is more acceptable in real life than the exchange rate.Law,but the calculation of PPP is a rather arduous task.Due to the problems of different quality and data collection in the data collection process,the calculated purchasing power parity index has certain errors.In order to understand the internal generation mechanism of the purchasing power parity index,improve the international comparison project,and improve the data quality of the purchasing power parity index,this paper studies the economic factors that affect the purchasing power parity.Under the above background,this paper first studies and analyzes the accounting principle and calculation method of purchasing power parity index,and combines the calculation formula of purchasing power parity index and related economic principles to analyze the factors affecting the change of purchasing power parity,in order to broaden The content of purchasing power parity has affected the influence of other macroeconomic factors other than data.This paper takes the “Belt and Road” countries as the research object,and divides the selected countries into different types of countries according to income categories,and observes them 2000-2017.The change of purchasing power parity index in the year,this paper selects the variables of PPP lag phase 1,per capita GDP,nominal exchange rate,trade dependence,money supply,industrial structure,unemployment rate and urbanization rate as the factors affecting PPP changes.Explain the variables,collect relevant data through the World Bank,after a series of tests,this paper selects a spatial Dubin model with fixed effects for modeling.After obtaining the results of the model,in order to further illustrate the reliability of the model results,this paper selects the subsample data from 2005 to 2017 for robustness test.The test results show that the spatial Dubin model constructed in this paper is robust and empirically tested.The result is that PPP lags in the first phase,per capita GDP,nominal exchange rate,money supply,tertiary industry ratio,and urbanization rate have a positive impact on a country's PPP,and due to spatial correlation,these neighboring countries The variables have a negative impact on a country's PPP;trade dependence and unemployment rate have a negative impact on a country's PPP,while PPP is also affected by the dependence of neighboring countries on trade and unemployment,and the empirical results are consistent with the assumptions.The research in this paper does not follow the pace of the predecessors.From the perspective of exchange rate,it explores the economic factors that affect the exchange rate fluctuations,but dynamically analyzes the factors affecting the purchasing power parity changes.For the rich content of purchasing power parity knowledge,understand the purchasing power.The intrinsic generation mechanism of parity has important significance in judging the accuracy of the purchasing power parity index data measured by international comparison projects.Since the research object of this paper is the countries along the “Belt and Road”,in order to balance international trade relations with these countries,from the perspective of influencing purchasing power parity,and reducing the arbitrage behavior between countries,four suggestions are proposed:(1)Maintain stable economic growth and rationally improve the industrial structure.(2)Maintaining the surrounding environment and achieving friendly trade relations.(3)Stabilize employment levels and narrow the gap between urban and rural areas.(4)Strengthen the management of exchange rate expectations and maintain the balance between domestic prices and international prices.