The Estimation And Factors Analysis Of Equilibrium Exchange Rate

This paper uses the macroeconomic data from the first quarter of 1999 to the third quarter of 2010, and the factor analysis to enrich the information of the data. They obtain two common factors. By analyzing, they consider that the factors indicate the factor of internal balance of macroeconomic and the external balance of macroeconomic. Then the paper uses the new variables to test the cointegration, and gets the cointegration equation and error correction model. Through research, the paper think that the exchange rate of RMB in the last research period is underestimated, but it is not so seriously. Simultaneously, with the result that the time of underestimate and overestimate of RMB is too long, the paper gives a suggestion about enlarging the interval of exchange rate floating.