The Impact Of Exchange Rate Regime's Choice Of Words And Deeds On Macroeconomic Performance

The exchange rate regime is an important part of a country's economic policy,and it has a major impact on the country's macroeconomic regulation and operation.Since the late 1970 s,countries have had the freedom to choose an exchange rate regime.However,in the process of economic development of emerging economies,the exchange rate regime often has the phenomenon of “fear of inconsistency” such as “fear of floating” or “fear of peg”.Why do emerging economies choose such an exchange rate regime with inconsistent words and deeds,and what kind of impact this exchange rate regime will have on macroeconomic performance.The answer to the above questions has not only certain theoretical value,but also has certain reference value for china,which is an emerging economy.Based on the above background,this paper takes emerging economies as research objects,and investigates the impact of exchange rate regime's choice of words and deeds on the macroeconomic performance,and then provides suggestions for the reform of China's RMB exchange rate regime.Focusing on the above topics.this paper uses a combination of theoretical and empirical research methods to analyze the exchange rate regime and macroeconomic performance of emerging economies in five chapters.The first chapter and the second chapter are the proposed stage of the problem,.This paper first examines the status quo of macroeconomic performance and regulation policies of emerging economies,and finds that the growth rate of GDP in emerging economies has declined,but the inflation rate has stabilized.At the same time,relatively loose economic policies have been chosen to promote economic growth.However,on the choice of exchange rate regime,it is found that there are widespread phenomenon such as “fear of floating” or “fear of peg” in emerging economies,then we analyze the impact of this special phenomenon on countrys macro economy.Focusing on the issues raised in the first part,this paper studies from two perspectives: theoretical analysis and empirical investigation.The third chapter studies the mechanism of the influence of the choice of words and deeds of the exchange rate regime on macroeconomic performance from the theory.and finds that the choice of exchange rate regime's words and deeds affects public expectations through the path of credibility,changes the public's behavioral decisions,and influences the established goals of policy implementation.On the basis of theoretical analysis,the fourth chapter empirically analyzes the impact of the choice of the exchange rate regime's words and deeds selection on macroeconomic performance in emerging economies.In the quantitative analysis of empirical investigations,this paper finds that if a country chooses a policy with a strong credibility and a consistent exchange rate regime,it will bring better economic growth performance and inflation performance,which is consistent with the conclusion of theoretical research in this paper.Through the previous theoretical research and empirical investigation,we found the conclusion at the fifth chapter: The impact of the choice of words and deeds in the exchange rate regime of emerging economies on macroeconomic performance is obvious.Its influence mechanism is manifested in credibility.The exchange rate regime,in which words and deeds are consistent or inconsistent has different credibility,and the difference in credibility has different effects on public expectations.Under different expectations,public decision-making behavior will produce differences,and this difference will have an impact on macroeconomic performance.The exchange rate regime with consistent words and deeds has good credibility,so it will have a positive impact on macroeconomic performance,and the exchange rate regime with inconsistent words and deeds is the opposite.Combined with this final conclusion,this paper believes that in the process of China's future reform of the RMB exchange rate regime,we must continue to deepen the reform of the RMB exchange rate on the basis of unswervingly maintaining a managed floating exchange rate regime,and at the same time pay attention to the exchange rate regime policy in the implementation of the policy.Words and deeds are consistent.To ensure that the "words" and the "line" are consistent,in order to ensure the smooth implementation of the exchange rate policy and promote the rapid and stable development of China's economy.The innovation of this paper is mainly reflected in the research perspective and the empirical interval: from the perspective of research.This paper starts from the perspective of exchange rate regime words and choices,and studies the impact of exchange rate regime selection on macro performance in emerging economies.Most of the previous articles have been studied from the perspective of different degrees of floating.It ignores the influence of policy credibility on the exchange rate regime.The empirical interval of this paper is from 2000 to 2016.The past empirical evidence interval is as of 2005.Compared with the previous research literature,the empirical interval of this paper is relatively new.