The Balassa Of The RMB Exchange Rate From The Perspective Of Labor Theory Of Value

Since the reform and opening up,the changes in the RMB exchange rate have attracted the attention of China and the international community and are hot issues of discussion.In the theory of real exchange rate research of the renminbi,the Balassa-Samuelson Hypothesis(BS effect)dominates.The BS effect theory holds that in countries with sustained economic growth,the relative increase in labor productivity in the tradable sector will cause the overall price level to rise and the real exchange rate to appreciate.Due to the subjective and objective conditions of the tradable sector,such as the production materials,the proportion of labor distribution and the improvement of technical equipment,the labor productivity between the tradable and non-trade sectors is relatively increased,while the labor value of Marx’s law on the change of labor productivity and commodity value On the basis of the value law of the law of value and price change,the price ratio of the two departments is relatively decreased,and the price of the non-trade sector is relatively increased,which leads to a relative increase in the overall price level,overvalued currency and appreciation of the exchange rate.Therefore,this paper studies the BS effect of China’s RMB exchange rate based on Marx’s labor theory of value and the law of value.This paper combs the relevant literatures of Marx’s labor theory of value and BS effect at home and abroad,and uses the time series data of China from 1985 to 2017 to test the BS effect of RMB exchange rate,and analyzes the impact of labor productivity and wage rate on the real exchange rate of RMB.The empirical part of this paper is based on the perspective of Marx’s labor theory of value.Assuming that the variables of the two foreign sectors are unchanged,the VAR estimation equation is obtained by Johansen cointegration test,and then the error correction model is established to test whether the short-term deviation can return to the long-term equilibrium.The impulse response model analyzes the impact of real exchange rates on short-term shocks of individual variables.The empirical analysis concludes that there is a short-term deviation between labor productivity and wage rate and the RMB exchange rate,but it will return to long-term equilibrium.At the same time,the impulse response analysis also shows that there is a dynamic relationship between the three,which is consistent with expectations.The positive correlation,the intermediate transmission mechanism of the real exchange rate of the RMB is basically in line with the BS effect theory.Therefore,in terms of policy formulation,it is possible to formulate corresponding targeted policies such as accelerating financial system reform anddeepening economic restructuring based on labor and labor value theory and BS effect theory.