Exchange Rate Framework - Traditional neoclassical models emphasize real factors while underestimating financial influences on exchange rates[3] - The neoclassical framework often leads to significant misjudgments regarding exchange rate assessments[4] - Post-Keynesian views argue that capital flows and expectations are core mechanisms driving exchange rate fluctuations[10] Capital Flows and Exchange Rates - In 2022, the daily trading volume in the foreign exchange market reached $7.5 trillion, significantly exceeding the $32 trillion annual trade volume[15] - The neoclassical perspective struggles to explain persistent trade deficits without corresponding currency depreciation[14] - The post-Keynesian approach better aligns with historical exchange rate volatility and the impact of capital flows[18] Renminbi Exchange Rate Analysis - From January 2022 to October 2025, the real effective exchange rate of the renminbi depreciated by 16%[19] - The phenomenon of "internal depreciation and external appreciation" of the renminbi challenges traditional neoclassical explanations[19] - Financial cycle adjustments have led to reduced demand and downward pressure on prices, affecting the renminbi's exchange rate[20]