The Real Exchange Rate And Economic Growth

The New Bretton Woods, also known as "resurrection Bretton Woods". The hypothesis was put forward by three economists Dooley, Fokers-landau and Garber at Deutsche Bank in 2003 based on the International Monetary System Perspective of the new century. The main point of view that is that due to massive money-printing by the U.S. Fed and the depreciation of currency exchange rate of the peripheral countries, achievement, the economic of periphery countries have achieved rapid growth at the beginning of the twenty-first century. And this new dollar system is the essence of the new era of Jamaica system, but the global trade pattern in the new Bretton Woods is similar to the old Bretton Woods system,so it is also known as the new Bretton Woods system. However, the outbreak of the subprime mortgage crisis since 2008 and the European debt crisis has causes enormous impact on the global economy.Countries have implemented quantitative easing monetary policy to Ease the recession. But it is hidden behind the world economic nationalism ideology, which have attempted to depress their currencies to stimulate their exports.Such global exchange rate control is bound to exacerbate global exchange rate fluctuations,bringing more uncertainty to the world economy.Therefore, in the current international background, to clarify the impact of exchange rate on economic growth is not only conducive to accelerate the recovery of the world economy, but also has important significance to improve the new international monetary system.In view of this,this paper compares the real exchange rate and economic growth relationship between the new and the old Bretton Woods system, trying to dig out the difference between the two periods of the new and old Bretton Woods system, and analyzes the reasons of the country. This paper first compares the differences between the new and the old Bretton Woods system,and then analyzes what is the differences in the the transmission mechanism of the real exchange rate affect economic growth under the new and old Bretton Woods system, then build the actual exchange rates affect economic growth theory model.This paper selects ten developing countries and ten developed countries 1960-1974 and 2000-2010 in the two phase of the panel data to do empirical research, the real exchange rate data through by the nominal exchange rate of U.S.Dollar Indirect Quotation Method,the empirical method is the SYS-GMM.The empirical results show that for both of the new and the old Bretton Woods system, the real exchange rate and economic growth of developed countries and developing countries are negative correlation. For the developed countries, the real exchange rate go down under the old Bretton Woods system which has a greater role in promoting economic growth, while developing countries are just the opposite,under the new Bretton Woods system, the currency is undervalued to promote a greater role in economic growth.Finally, the paper combined with the empirical results and the current international situation and puts forward policy suggestions for both the economic growth of the developed countries and the developing countries.