Overview on Equilibrium Exchange Rate under the Perspective of Virtual Economy

Equilibrium exchange rate reflects the consistency of foreign exchange rate and real economy equilibrium, while the exchange rate volatility which deviates from the equilibrium level reflects the virtual economic attributes. This paper reviews the studies on equilibrium exchange rate under the perspective of virtual economy and includes three aspects: first, the determination of equilibrium exchange rate; second, the impact of exchange rate's imbalanced fluctuations on real economy; third, the macroeconomic policies response to exchange rate imbalances. This paper pays special attention to the combination of international experience and RMB, and attempts to provide references to establishing the RMB exchange rate formation mechanism and risk prevention mechanism in the context of the internationalization of RMB.