Study on RMB Exchange Rate Misalignment Based on BEER Model

Data of the period from the first quarter of 2000 to the last quarter of 2008 were taken as sample.Co-integration was applied to get the impact coefficient of the vectors of basic economic factors on equilibrium exchange rate.The degree of current RMB exchange rate imbalance in sample period was estimated based on equilibrium exchange rate BEER model.The results show that,government expenditure has the greatest impact on RMB equilibrium exchange rate;terms of trade and net foreign assets change in the same direction with equilibrium exchange rate;measuring current RMB exchange rate through the RMB equilibrium exchange rate equation from the model.It showed that,RMB was mostly underestimated in sample period;In addition,the exchange rate reform in 2005 made RMB exchange rate appreciate in a row in three quarters and be close to equilibrium,in long term,there is still upward pressure on the RMB exchange rate.