Study Of China's Exchange Rate Regime Choice Under The View Of Economic Fluctuation

The exchange rate, which is an important variable to the macro economy of a country, has a special important influence on the economic operation in an open economy. And this influence work through idiographic exchange rate regime arrangement. So it is very important to choose a suitable exchange rate regime for the benefit of maintaining the macro economic stability and realizing the financial sustainable development. This paper mainly researches the exchange rate regime under the view of economic fluctuation.This paper extends the research mainly according the model (I) which was proposed by Aghion and his co-agents in March in 2006. Their analysis shows that different exchange rate systems not only affects the level of economic growth, but also have a major impact on the stability of economic growth.The point of innovation in this paper is revising model (I) from two aspects and the result on the base of new models is very significant.Further, on the base of China's economic data, comparing the revised models and the original model from empirical analysis aspect, found that the revised models are better than the original model. Moreover, China's exchange rate fluctuations Granger cause the economic fluctuations, and their inverse relationship is not so clear.Lastly, according the result of the whole paper, it points out that we should pay attention to the time of China's exchange rate reform. And more flexible exchange rate regime will be easier to result in the economic fluctuation. So it is necessary for China's government to manage the exchange rate in a proper and effective way. But we should enhance the China's financial development level on a long view.