Real Effective Exchange Rate Fluctuation and its Co-movement Relationship with Terms of Trade Based on Grey System Incidence Model Evidence from Five Main Trade Commodities

摘要

Taking five main trade commodities of China as samples,grey system incidence model is employed to analyze the co-movement relationship between the real effective exchange rate (REER) and terms of trade (ToJ),which indicates that the fluctuation of REER has brought little influence to the ToT of particular commodities with undifferentiated grey absolute incidence degree,and the commodities with higher technology and capital intensive will be more probably affected by the fluctuation of REER based on grey relative and synthetical degree in ranking order as follows: Parts of Automatic Data Processing Equipment (PADPE) > Integrated Circuit (IC) >Steels > Liquid Crystal Display (LCD) > Petroleum Products (PP).The whole modeling processes adequately demonstrates the efficiency,robustness and applicability of grey system incidence model