The Research On The Unbalanced Rmb Exchange Rate On The Basis Of The Flexible Price Monetary Model

Whether the scientific evaluation of a country's level of exchange rate is reasonable or not lays its critical point on the consistency of the realistic and equilibrium rate of exchange. Under the condition of opening economy, if the realistic rate of exchange goes too far from that of the equilibrium, this will lead to unbalanced rate of exchange. It will also influence the country's economic stability and sustainable development. This bad influence will spread to the social welfare and international relationship, etc.. In recent years, the continued appreciation of RMB has produced negative effect to the increasing of China's economy. China's export trade is confronting with great challenges. A big sum of idle fund, which was attracted by the prediction of continued appreciation of RMB, entered into Chinese market and increased the domestic banking risk. There is still a controversial debate between the scholars from home and abroad on the existence of under-evaluate of RMB. Nowadays, is there unbalanced situation in the RMB rate of exchange? It needs the research on the basis of the calculation of the RMB equilibrium rate of exchange.The basic idea of this thesis is monetarism exchange rate theory. The author compared and chose the Flexible Price Monetary Model to study the issue of China's recent RMB rate of exchange. Through the inspection of the solid examples, it drew the conclusion that Flexible Price Monetary Model is suitable to RMB rate of exchange. Furthermore, on the basis of the Flexible Price Monetary Model and coordinative principle, the author used the annual data (1990-2009) of basic economic variable quantity to measure and calculate the balanced RMB rate of exchange of the past twenty years. The thesis focuses on the analysis of the situation and reason of the unbalanced RMB rate of exchange. According to three over-estimates and two under-estimates, combining with China's main economic quota both home and abroad, the thesis also studies on the influence brought by the unbalanced RMB rate of exchange. For example, the influence on China's import and export, balance of trade, direct investment of the foreign businessmen, foreign exchange storage, etc.. At last, considering the trend and character of the recent RMB rate of exchange, the author proposes some suggestion of improving the mechanism of the RMB exchange rate and setting up the target area of exchange rate fluctuation.