Study On The Path Of Asset Prices And Its Effects That The Exchange Rate Affects The Real Economy

Since the exchange reform, the continued appreciation of the RMB have caused the influx of hot money, and played an important role in fueling the formation of asset market bubbles. In recent years, the appreciation pressure on RMB exchange rate has not been effectively resolved. In order to maintain the RMB exchange rate stable or decreasing exchange rate fluctuations, the central bank bought foreign exchange each year passive, foreign exchange has become a major channel for the supply of base money. The resulting large number of base money injected, resulting in rampant liquidity, appreciation pressure on the currency of the formation. Appreciation pressures will inevitably lead to the monetization of domestic inflation, triggering a real effective exchange rate of RMB appreciation pressure on RMB appreciation expectations in the situation there, the hot money inflow promotes further expansion of our asset prices and then formed a "vicious circle." Asset price bubble in China's economic development is undoubtedly the potential risk, and public attention focus on the trend of the real economy because of the soared asset prices in recent years.. This reference currency exchange rate determined by analysis of the exchange rate affect the real economy will be the asset price path modeling and empirical analysis. The results show that, empirical results show that China's RMB exchange rate affect the real economy, the effective share price effects, in the long run ,is not smooth, in the short term, conduction channels instability that in some period of time the exchange rate of appreciation in asset prices , the growth of the real economy has played an important role, and some period of time from the change in the opposite direction, this will be. The path of exchange rate affects the real economy, real estate prices is relatively smooth, but susceptible to external shocks, that is, adjusted slowly. The implementation of a moderately easy monetary policy in order to solve the impact of current financial crisis in China is the reason that caused the Chinese real estate bubble by providing a macro-economic conditions, coupled with the persistence of RMB appreciation expectations, excessive increases in asset prices on the real economy enough to adversely impact. In asset prices, price inflation should be considered under the trade-off between monetary policy objectives, to actively consider China's loose monetary policy of the exit time.