Study On Country Difference Of Survival Time Of Exchange Rate System Based On Cox Model

For nearly two hundred years,the exchange rate system arrangements of countries have been in the process of transformation,no country has always adopted a fixed exchange rate system,but the exchange rate system of different countries has been changed very slowly.Every outbreak of war will lead to a dramatic change in the world’s exchange rate system.World War I and World War II brought down the gold standard and the Bretton Woods system,respectively.After this,the floating exchange rate system gradually became the exchange rate system arrangement of most economically developed countries,while some economically underdeveloped countries actually adopted a fixed exchange rate system linked to hard currencies,while others tried and explored between fixed and floating exchange rate systems,thus creating a soft peg exchange rate system,that is,the intermediate exchange rate system.The marketization of exchange rate system is also a hot topic in our country in recent years.The "811 exchange rate reform" in 2015 was an attempt by the central bank to market the exchange rate system,which was arranged from a creepy system to a floating exchange rate system.But the attempt ended in failure after just three days,and the central bank proposed a new mid-price decision mechanism.After this,with the development of China’s economy,more and more people put forward the call that China’s exchange rate system can achieve free floating.Many economists have also discussed whether China’s exchange rate system can be fully floated.But the conclusions are basically no.This paper will discuss the selection of China’s exchange rate system from the perspective of the influence factors of the exchange rate system.This paper collected panel data on exchange rate regimes in 155 countries(including 101 developing countries,25 emerging markets,29 developed countries)from 1980 to 2014,using Ilzetzki,.Reinhart and Rogaff(2019)The classification method of exchange rate system and the classification of the country type of MICI company are divided into three categories.The survival of different types of national exchange rate systems is studied by using the survival analysis method.In particular,first,the survival curve of different exchange rate systems is drawn using the Kaplan-Meier method(by positive limit method)to determine whether there is a significant difference in the survival rate of different exchange rate systems as a whole;The cumulative risk model of Nelson-Aalen and the Smooth baseline risk model are used to compare the lifetime of different types of national exchange rate system,and finally,the regression model of time-dependent variables is analyzed by using Cox scale to analyze the influencing factors affecting the lifetime,and the key influencing factors of the survival of different types of countries are pinned and floating exchange rate system.Through this study,it is found that the factors that affect the choice of exchange rate system in different countries in different stages of economic development are different.In particular,this paper concludes that(1)the survival of floating exchange rate system in countries with different levels of development is different.The floating exchange rate system in developed countries has the longest survival period,the second most developing countries,and the shortest survival of floating exchange rate system in emerging market countries.(2)The survival factors of the floating exchange rate system in different countries with different levels of development are different.When a country’s exchange rate system arrangement is not suitable for its economic development,the factors affecting the exchange rate system arrangement are more complex,the risk of the survival of the exchange rate system is higher,and the survival of the exchange rate system is shorter.The most decisive factors are factors in the survival of floating exchange rates in developing and emerging market countries.(3)The impact of trade openness on the survival of floating exchange rate systems in all types of countries is significant,and when other factors are fixed,the risk of exiting the floating exchange rate system increases considerably for every one percentage point increase in trade openness.(4)When the covariate variable is smaller than the corresponding non-tempo-covariate parameter value.Therefore,if the ratio risk hypothesis test is not carried out in estimating the life of the exchange rate system,the direct use of cox model for analysis will exaggerate the influence of some factors on the survival of the exchange rate system.(5)When a country chooses different exchange rate system arrangements,the same factors have different effects on the survival of the exchange rate system,and the direction of action may be the opposite.(6)China’s economic and financial markets are not perfect,macroeconomic development is highly unstable,the economy is highly dependent on exports,and capital items have not been fully convertible.Therefore,China is not suitable to adopt a fully floating exchange rate system,the need to gradually achieve the full floating exchange rate system.