The Estimation of Long-term Equilibrium Exchange Rate on the Basis of Method of Gonzalo and Granger

The research on RMB appreciation or depreciation is to study the phenomenon of actual exchange rate which is overestimated or underestimated,and the actual exchange rate fluctuation should take the balanced exchange rate as the center.In order to analyze the estimation of the long-term equilibrium exchange rate,with the determination model of the equilibrium exchange rate-MacDonald 1998,employing the advanced econometric method in the world,common long-term components decomposition,inaugurated by Gonzalo and Granger,this article is to study the long-term equilibrium exchange rate of RMB.The conclusion shows that the nominal exchange rate of RMB is underestimated;Currently,RMB appreciation is correct,and is ultimately.Stemming from the strategic consideration of foreign exchange system reform,we should let the nominal exchange rate of RMB appreciate suitably.