Empirical Analysis of RMB Elasticity of Substitution in the East Asian Region——Expansion Research based on the “Portfolio Theory of Money Demand” Model
SHI Jian-xun,YIN Ping,LI Hai-ying
School of Economics and Management,Tongji University,Shanghai 200092,China
Abstract：
With the start of the China-ASEAN Free Trade Area and further Economic Cooperation between the Mainland and Hong Kong,Macao and Taiwan regions,the degree of economic integration between China and Asian region is increasingly higher. RMB circulation in the neighboring regions,as well as East Asia expands continually,which enhances the possibility of RMB to be the regional dominant currency greatly. Based on the expansion of the portfolio theory of money demand model,this paper explores currency elasticity of substitution of RMB in East Asian region by analyzing panel data from 2000 to 2011. The results show that RMB has the potential to replace the dollar,which provides strong theoretical support for the RMB regionalization feasibility.
SHI Jian-xun,YIN Ping,LI Hai-ying.Empirical Analysis of RMB Elasticity of Substitution in the East Asian Region——Expansion Research based on the “Portfolio Theory of Money Demand” Model[J] Economic Survey, 2013,V1(3): 63-67
2013 
