An Empirical Study Of Economic Growth Expectations And Exchange Rate Changes

The real effective exchange rate is the weighted average of the bilateral nominal exchange rate of the currency of a country's currency and all trading partner countries.Regarding the changes in exchange rates,domestic and foreign scholars have already made rich and farreaching discussions on the study of economic changes in a country,and they are convinced that changes in real exchange rates will have a major impact on a country's economic trade.In recent years,the study of the economy's exchange rate changes has gradually begun to develop.In addition,in economics,the importance of expectations has long been recognized,and the economist who first gave the highest status in his writings was Keynes.At the same time,our well-known theory of interest rate term structure theory is expected to be taken into account in the exchange rate determinants.At present,there are many theories at home and abroad to study the factors that influence the real exchange rate,and the mechanism and empirical research on the effect of economic growth on the real exchange rate is still rare.Based on the previous theoretical and empirical research,this paper takes the adaptive expectation theory and the rational expectation theory as the theoretical support of this paper.The actual effective exchange rate is used as the research object,and the economic growth is studied from the theoretical and empirical aspects.The impact of expectations on changes in real effective exchange rates.In the empirical process,firstly based on the multiple linear regression model,this paper establishes a real effective exchange rate,GDP growth expectation,real interest rate,productivity,trade openness,population structure and foreign business including multiple countries(50 samples in the paper).The analysis framework of the seven factors of direct investment,in which the real effective exchange rate is the dependent variable and the GDP growth expectation is the independent variable.The data interval is 1994-2017 and combined with the 2017 global GDP ranking and the comprehensive real effective exchange rate.Panel data from 50 countries were selected to empirically analyze the impact of economic growth expectations on the real effective exchange rate.In order to make the empirical results more reliable,empirical analysis was carried out from the short-term(1 year),medium-term(5-year),and long-term(10-year)time periods.The empirical model used was a multiple linear regression model,the main analysis.The verification method is: Levin,Lin,Chu(LLC)unit root test and multiple regression analysis of the panel data.The empirical results show that the economic growth expectation has a significant impact on the real effective exchange rate and is a positive correlation.Finally,this paper discusses policy guidance and research perspectives on the impact of economic growth expectations on exchange rates.If we can predict changes in exchange rates through changes in the expected growth of a country's economic growth,national economic managers can deal with the huge impact of exchange rate changes on a country's economy in advance,and avoid large fluctuations in exchange rates.The processing and research in this paper is still insufficient in some places,which will be an important direction for future research.