Changes In The Exchange Rate Of Employment

Since the second world war,the international monetary system has changed greatly. Each country's monetary policy is also increased by a lot of unstable factors. What kind of monetary policy is chosen to ensure steady growth of GDP,maintain the balance of international payments, economic rational structure adjustment and do not effect employment?Do the changes in the exchange rate have influence on Chinese employment amount and employment structure? These problems are main topics in our current exchange rate system reform.Though the western economic exchange rate fluctuation influence on the historical development of employment,the influence of exchange rate on employment is analysed by supply and demand theory and conduction mechanism. The main view and theory development of exchange rate's effection on employment are elaborated in this paper. Changes in the exchange rate directly affect the prices of goods in domestic and abroad, domestic fixed assets price, and domestic and foreign capital inflows and outflows. It also affects domestic import and export trade , investment and consumption and domestic total investment and domestic economic growth. Domestic investment stock is effected by domestic economic growth. The changes in domestic investment stock and capital effect the demand of employment. And then have effection on domestic employment amount and structure.The effection of exchange rate on employment is analysed empirically by the support of related theory and model. The analysis of employment amount is studied empirically by the stata of domestic unemployment and the real exchange rate from 1980 to 2009. The analysis of employment structure is studied by national third industry employment proportion and real exchange rate index from 1990 to 2009. The comparison between China and Japan is analysed in the view of economic growth according to economic history comparability between these two countries. The infulence of difference between changes of exchange rate and employment is analysed in this paper. The suggestion to exchange rate selection is given in this paper.Research results show that in the view of amount employment, RMB appreciation has negative effection on employment amount. The unemployment rate will rise 0.3677 percentage point, when exchange rate rises one percentage point. At the view of employment structure, the effection of Chinese exchange rate's change has something with employment structure. Local currency appreciation has negative impact on employment in trade department,and has positive impact on employment of non-traded department. From the angle of economic growth,the effection of exchange rate on employment between China and Japan is compared in this article. The appreciation of RMB Exchange Rate brings less negative influence on Chinese employment than the appreciation of yen brings to Japanese employment. The appreciation of local currency exchange rate has greatly destruction on domestic economy. The choice of slow RMB appreciation is a reasonable to Chinese current situation.