The Rationality Of The Level Of RMB Exchange Rate

RMB exchange rate has always been a big problem that influences Chinese economic development. Exchange rate, as an important variable of one country's external economy, expresses the merchandising ratio between one country's currency and another. Especially after the financial crisis in 2008, RMB exchange rate has attracted great attention from the international society. Whether current RMB rate is reasonable, whether RMB should be appreciated and how much should it be, all of which have become one of the highlights in the research of domestic and foreign economists.In the study of the reasonability of RMB exchange rate, this Paper firstly introduces the concepts and theory model related to equilibrium exchange rate, including mainly Basic Elements Equilibrate Real Exchange Rate Theory Model, Natural Equilibrium Real Exchange Rate Theory Model, Behavior Real Exchange Rate Theory Model and Exchange Rate Theory Equilibrate Real Model about developing countries. Secondly, it gives a brief introduction to those theory models. In the Paper, it holds the viewpoint that Montiel's Equilibrium Exchange Rate Theory Model matches current economic development in China. So the basis of the Paper is Montiel's Equilibrium Exchange Rate Theory Model.Based on this theory, the Paper chooses relative technical progress rate, government spending levels, trade conditions and openness as explanatory variables, and practically effective exchange rate of RMB as enplaned variable, adopts 2010 quarterly data of the first and the second quarters to study the relationship between equilibrium exchange rate and the actual explanatory variables. The mainly econometric methods adopted include ADF unit root test, E - G two-step co-integration test and error correction model to demonstrate that the economic fundamentals elements and actual and effective exchange rate have a long-term equilibrium relationship. It also analyses the variables'influence on RMB actual and effective exchange rate in short term.Then, it uses H - P filtering method for RMB equilibrium exchange rate empirically to do actual measurements, and estimates the disorder degree of RMB exchange rate. After this, the Paper further studies the impact of RMB exchange rate disorder to the import and export of our country. The result indicates that RMB exchange rate disorder can influence China's import and export, but it is not the main factor, which is domestic output and actual and effective exchange rate.And then, the Paper gives policy suggestions on how to improve the RMB exchange rate disorder condition, mainly including: promoting balanced development of economy, improving economic development structure; perfecting foreign exchange market, gradually establishing mercerization of RMB exchange rate mechanism; keeping the stability of RMB exchange rate.At last, aiming at the influence of RMB actual and effective exchange rate on the regional economy development, the Paper takes Shanxi Province as an example for analysis and gives advices on how to deal with the RMB exchange rate fluctuations in Shanxi Province. The core is to adjust the economic structure and to change the mode of economic development.