An Emprical Study of Foreign Exchange Rate in Taiwan and China under Exchange Rate System Reform
| Autor: | Wang, Jiun-Wen, 王俊文 |
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| Rok vydání: | 2009 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 97 Presently, China follows the managed floating exchange rate system that has a large scope for reformation. In contrast, Taiwan has evolved from the managed floating exchange rate system to the free floating exchange rate system. Further, it has experienced foreign exchange market reforms followed by periods of economic boom and depression. This study investigates the impacts of the variables of exchange rates in different periods in Taiwan and China. We attempt to discuss how the impacts of variables of exchange rates in Taiwan predict the RMB （renminbi） exchange rates when China moves toward the free floating exchange rate system. According to the exchange rate systems of Taiwan and China, we divide the period considered in our study into three parts. The first part is the managed floating exchange rate system from 1981 to 1990, the second part is the free floating exchange rate system from 1991 to the present date in Taiwan, and the third part is the managed floating exchange rate system from 1996 to the present date in China. We use a cointegration test and error correction model for the research and analysis of our theme. An empirical result manifests that the NTD（New Taiwan Dollar）exchange rate in earlier stage is the main cause for the volatility of the NTD exchange rate when Taiwan adopted the “managed floating exchange system.” However, the terms of trade arise as the main effect of the NTD exchange rate under the “free floating exchange system” after the reform of the TWD（Taiwan Dollar）exchange rate was executed. As a result, the policy after reforms promotes the interdependence between the NTD exchange rate and the trade of imports and exports. With regard to the Chinese system, monetary supply and the trade of imports and exports could affect the RMB exchange rate. In addition, by using Granger Causality Test, Impulse Response Function and Variance Decomposition, we can find that under managed floating exchange rate system, Taiwan’s monetary policy is the main cause of the fluctuation in NTD exchange rate, and will also influence other economic factor. While under free floating exchange rate system, NTD exchange rate is mainly influenced by the volatility of economic factor. Both China and Taiwan adopt managed floating exchange rate system through the adjustment of money supply to apply its exchange rate policy. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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