The Mechanism and Empirical Study on the Multiple Equilibria Exchange Rate of RMB

摘要

This paper establishes an endogenous economic growth theory model by introducing exchange rate factor. Considering exchange rate as a policy variable, we discuss the multiple equilibria relationship among aggressive exchange rate policy, passive exchange rate policy, labor productivity and economy growth and confirm further the mechanism of multiple equilibria of RMB exchange rate. The results of the empirical test in this paper show that, multiple equilibria of RMB exchange rate does exist in the different economic development stages, and only the aggressive exchange rate policy can achieve the optimal, which is the equilibrium of welfare maximization. The finding of dynamic mechanism has a significant effect on exchange rate movement and dynamic mechanism of monetary authorities.