| With the global economic integration and the financial liberalization, as a maineconomic leverage and means of adjusting macro economy, exchange-rate plays animportant role in national economic growth. Furthermore, it is a main instrument ofpromoting balance of payments, developing national economy and adjusting themoney supply. A rational level of exchange rate is always key to allocate resourceseffectively between trade and non-trade departments. Equilibrium exchange rate asone of the core issue in the exchange rate theory，provides a main objective basis forjudgment whether the exchange rate level is reasonable.In recent years,UnitedStates-led several countries continue to put pressure on China to revalue RMB.Underthis background,the RMB revalues unceasingly.Then, does the RMB shouldappreciate how many, and to a What level?Thus the research of the RMB equilibriumexchange rate has important practical significance.The development of western equilibrium exchange rate theories has gone throughfive stages,including PPP theory, Fundamental Equilibrium Exchange Rate theory,Natural Real Exchange Rate theory, Equilibrium Real Exchange Rate theory andBehavioral Equilibrium Exchange Rate theory. With the reference of westernBehavioral Equilibrium Exchange Rate (BEER) model, in the light of the practicalsituation of China and in consideration of the availability of data, this paper selectsfive variables of foreign exchange intervention to construct a RMB equilibriumexchange rate model,including money supply, labor capacity, terms of trade and theliberalization of trade between the first quarter of1994and the first quarter of2011. Ituses ADF test, cointegration test, error correction and other econometric tools toconduct the empirical research on RMB equilibrium exchange rate and to calculate thelevel of RMB equilibrium exchange rate and the degree of exchange ratemisalignment. The study shows that RMB effective exchange rate was overvalued andundervalued alternatively between1994and2011. The overvaluation mainlyhappened in three periods:1997.3-1998.3,2001.2-2002.1and2007.1-2007.4, whilethe undervaluation mainly appeared in four periods:1994.1-1996.3,1999.1-2000.3,2002.3-2005.3and2008.1-2009.2; however, the range of overvaluation andundervaluation was small, with the maximum of10%.Besides, this paper also analyzes the cause of RMB exchange rate misalignment, holding that China’s three times exchange rate reforms are the most influential factorand the external factors such as the financial crisis, strength of the dollar anddomestic inflation also contribute to the RMB exchange rate misalignment.So,it isnecessary to guide through the way puting forward the proposal of enhancing themarketing degree of RMB rate forming mechanism, improving the foreign exchangerate intervention mechanism and RMB flexibility and implementing a basket ofcurrencies to promote the RMB real exchange rate return to the equilibrium exchange rate andmaintain a reasonable level of stability. |
