Abstract
At the end of 2010 China’s foreign exchange reserve reached $2847.34 billion, the author designs the maximum government utility function when consider the China government buys a part foreign exchange if company earns, it means that the China government will increase Ren-Min-Bi Yuan. And it will cause inflation. The inflation will cause disutility to government. Finally it gets the optimal fuction. VAR Regress finds the fitted value and actual value of foreign exchange reserves is nearly equal within 99.8%. The thesis gets the long term equilibrium relation of the nature logarithm of variables by VEC model, which are foreign exchange reserves, standard error of export, marginal propensity to import, the opportunity cost for foreign exchange reserves, marginal output to export. Using the sample datas in China 1980-2006 and VEC, we can find that (1) the government-holding foreign exchange reserves has positive correlation with the export standard error, (2) the government-holding foreign exchange reserves has positive correlation with the marginal propensity to import. The data and regression method are all different, but all have the positive correlation between the foreign exchange reserves and export standard error.
Highlights
This template, In order to study demand model of optimal foreign exchange reserves based on Chinese government utility maximization and analysis of Chinese foreign exchange reserves, the thesis arranges as the followings: the first section designed the demand model of optimal foreign exchange reserves based on Chinese government utility maximization, the second section analyzed the unit root test and cointegration of optimal foreign exchange reserves based on government utility maximization, the third section analyze VAR and VEC model of optimal foreign exchange reserves based on government utility maximization, the fourth section is the summary of this thesis
In order to study the demand model of optimal foreign exchange reserves based on Chinese government utility maximization, the thesis arrange as the followings: First, the authors analyzes the significance and objectives of the research, review the literature
The thesis finishes the following researches: 1) The author designs the government utility function when consider the China government buy part foreign exchange if company earn, it means that the China government will increase Ren-Min-Bi yuan, and it will cause inflation
Summary
This template, In order to study demand model of optimal foreign exchange reserves based on Chinese government utility maximization and analysis of Chinese foreign exchange reserves, the thesis arranges as the followings: the first section designed the demand model of optimal foreign exchange reserves based on Chinese government utility maximization, the second section analyzed the unit root test and cointegration of optimal foreign exchange reserves based on government utility maximization, the third section analyze VAR and VEC model of optimal foreign exchange reserves based on government utility maximization, the fourth section is the summary of this thesis. ZENG demand model of optimal foreign exchange reserves based on government utility maximization
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