Positive Test on Influence of Currency Mismatch on Effectiveness of China's Currency Policy

Currency mismatch,a problem emerging widespread in new market economy countries,hard to solve in a short time,may result in currency crisis,increase the cost of resolving the financial crisis,interfere with the normal operation of the exchange rate system,impact on effectiveness of currency policy and have wide and profound effect on macro-economy.China,among these countries,has severe claims on currency mismatch,even more severe.According to statistics from 1987-2006,the paper uses positive test to analyze effects on China's currency policy——output and price effects.The findings show that currency mismatch reduce the effectiveness of currency policy.Accordingly,reduction of currency mismatch will improve effectiveness of currency policy.