Simulation Study of General Equilibrium Analysis of Exchange Rate

With the improvement of our openness and the pressure of RMB appreciation in recent years, studies the equilibrium exchange rate is extremely important. First,the article introduces the background and current status of the equilibrium exchange rate. Second,the article is not innovative empirical analysis in the past, but through the simulation method by CD and CES production function, use the program to calculate the equilibrium exchange rate .By changing the amount of money supply and labor supply of country 1 and country 2 to observe whether the exchange rate changes.Finally,we know that the change of labor supply does not affect equilibrium exchange rate, changes in the money supply affect the equilibrium exchange rate, exchange rate changes and to analyze the reasons for the appreciation or depreciation of the currency. Finally, a brief introduction to the current exchange rate regime and its reforms.