The Research Of Currency Substitution And Monetary Crisis In Developing Countries

Since the last century in 80s,developing countries' currency crisis are being more frequently.At the same time,these countries also appeared serious phenomenon of currency substitution,the relationship between the two studies may be beneficial to developing countries in the post crisis era of risk prevention.This paper studied all four kinds of classical theories of currency substitution in this paper,and then,a new currency substitution model is put forward base on the Liquidity Preference Theory.This paper also studied the first to third generation of currency crisis theories,based on which,it gave a new currency crisis model under currency substitution.Based on these two new models,this paper studied the relationship between currency substitution and currency crisis,and the paper agree that currency substitution rate can also tell the currency crisis risk,which should be paid more attention.Finally,this paper studied the possibility of currency crisis in the process of financial reform in China,and puts forward some policy recommendations.This paper defines the concept of currency substitution and currency crisis.And based on the study of four kinds of currency substitution theory and the three generation of currency crisis theory,this paper constructs the model of currency substitution based on multiple motives to study the mechanism of currency substitution and currency anti substitution from the two aspects of the transaction and the precautionary motive and the portfolio and the precautionary motive,pointed out that the domestic and foreign interest rate,economic growth,political system,policy continuity,social stability conditions and other factors can influence the foreign currency assets demand by affecting the confidence in the currency,causing the currency substitution or anti substitution;this paper also constructs a model of currency crisis based on currency substitution in the developing countries,pointed out that the currency crisis throughout the entire process of the high-speed development period,the economy stable development phase and deceleration phase(or recession),with the economic development stage,the currency substitution also changes.This paper finishs the Group-Granger test of panel data of each alternative factors and currency substitution rate,then using the rolling regression method to test the endogenous structural breaks of the currency substitution rate,found that these currency substitution rate does exist a cycle which is in three stages.Finally,the China currency substitution status and currency crisis possibility were analyzed,using the rolling regression test,this paper found that China currency substitution has haven the first mutation,and then put forward the policy suggestions for our country.