Analysis of Exchange Rate and the Elasticity of Trade Balance in China
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DOI: 10.23977/fmess2020.030
Corresponding Author
Zi Lin
ABSTRACT
The exchange rate is the price comparison between the two countries' currencies. The change of the exchange rate level of a country will play a regulatory role in the changed trade and ultimately have an important impact on the internal and external balance of the national economy. Therefore, the impact of exchange rate changes on foreign trade has been an important topic worthy of study. Based on the analysis of China's exchange rate level and the basic situation of import and export trade, this paper makes a normative Empirical Study on the impact of exchange rate changes on China's export trade volume according to the actual data and samples from 2006 to 2018 by Using Marshall Lerner condition theory. It is found that the effect of short-term RMB exchange rate changes on China's export trade volume is not significant.
KEYWORDS
Foreign exchange, Marshall-Lerner condition, The Elasticity of Trade Balance