Liu, Xiaohui; Fan, Conglai - In: Frontiers of Economics in China 5 (2010) 2, pp. 187-209
Under the Mundell-Fleming-Dornbusch (M-F-D) framework, the paper develops a stochastic model to study the optimal choice of RMB exchange rate regime based on two objectives, namely the exchange rate stabilization and price stabilization. The paper finds that different policy objectives will lead...