| Summary: | 碩士 === 國立暨南國際大學 === 國際企業學系 === 100 === This thesis estimates China’s equilibrium exchange rate and misalignment since China announced a shift in exchange rate policy from a simple peg to the US dollar to a basket peg about 11 countries by using the dynamic panel GMM estimators with the period of 1975-2010. We estimate the China’s equilibrium exchange rate based on using the purchasing power parity from Penn World Tables with the consideration of Balassa-Samuelson effect, and the others variables from the theory defining equilibrium exchange rate, including BEER/FEER. Compared panel data (fixed/random) model with dynamic panel GMM Estimators, we find Renminbi is significantly overvalued by 31.3% and undervalued by 52.2% .We concern real exchange rate with not only the persistent but also cause and effect with other Macroeconomic variables.We consider the results of exchange rate misalignment using dynamic panel GMM estimators solving endogeneity problems by lag term of real exchange rate are more reliable and significant. With long term estimation, sign dosen’t change across model specifications. We summarize our findings as follows:
1. The coefficients of lagged real exchange rate are positive (0.61~0.82).
2. Real exchange rate have positive relationship with government operating balance(0.0047~0.0099),and negative relationship with money supply(-0.03~-0.068)；have a positive relationship with capital account openness(0.007~0.03)； Current account with negitive relationship (-0.003~-0.004)
3. With dynamic panel GMM estimators ,we find Renminbi is significantly undervalued by 52.2% .
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