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Author: Miss Sonali Das Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 40
Book Description
We study the transmission of conventional monetary policy in China, focusing on the interaction between monetary and fiscal policy given the unique institutional set-up for macroeconomic policy making. Our results suggest some progress but also continued difficulties in the transmission of monetary policy. Similar to recent studies, we find evidence of monetary policy pass-through to interest rates. However, the impact of monetary policy measures that are not coordinated with fiscal policy is significantly weaker than that of coordinated measures. This suggests the need for further improvements to the interest-rate based framework.
Author: Miss Sonali Das Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 40
Book Description
We study the transmission of conventional monetary policy in China, focusing on the interaction between monetary and fiscal policy given the unique institutional set-up for macroeconomic policy making. Our results suggest some progress but also continued difficulties in the transmission of monetary policy. Similar to recent studies, we find evidence of monetary policy pass-through to interest rates. However, the impact of monetary policy measures that are not coordinated with fiscal policy is significantly weaker than that of coordinated measures. This suggests the need for further improvements to the interest-rate based framework.
Author: International Monetary Fund Publisher: International Monetary Fund ISBN: 1451844239 Category : Business & Economics Languages : en Pages : 33
Book Description
Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.
Author: Michael McMahon Publisher: International Monetary Fund ISBN: 1484385640 Category : Business & Economics Languages : en Pages : 32
Book Description
Financial markets are eager for any signal of monetary policy from the People’s Bank of China (PBC). The importance of effective monetary policy communication will only increase as China continues to liberalize its financial system and open its economy. This paper discusses the country’s unique institutional setup and empirically analyzes the impact on financial markets of the PBC’s main communication channels, including a novel communication channel. The results suggest that there has been significant progress but that PBC communication is still evolving toward the level of other major economies. The paper recommends medium-term policy reforms and reforms that can be adopted quickly.
Author: Mr.Luis Brandao-Marques Publisher: International Monetary Fund ISBN: 1513529730 Category : Business & Economics Languages : en Pages : 54
Book Description
Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.
Author: Wei Liu Publisher: Springer Nature ISBN: 9811990603 Category : Business & Economics Languages : en Pages : 299
Book Description
This book chooses four different transmission mechanisms of interest rate, credit, exchange rate, and asset price to study whether China’s monetary policy has an impact on these four transmission mechanisms and then studies whether these four transmission mechanisms have an impact on the macroeconomy, so as to determine the impact of China’s monetary policy on macro-goals.
Author: Sandrine Lunven Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The objective of this thesis is to enhance the understanding of the determinants and the transmission mechanisms of monetary policy in China over the last two decades. It contributes to the literature providing two new composite measures of monetary policy in China based on alternative approaches, one combining the large range of monetary policy instruments and the other based on central bank speeches. Both prove to be essential to take into account the complex and adaptive behavior of the People's Bank of China (PBC). Our instrument-based monetary policy index emphasizes substantial changes in policy style towards smoother but more hawkish policy moves from 2002 onwards, consistent with the start of the mandate of Governor Zhou Xiaochuan, the interest rate liberalization process and the increasing trade and financial opening. Moreover, the estimation of a discrete-choice model implies a conduct of monetary policy characterized by an inflation-accommodating policy before 2002 and an implicit inflation targeting from 2002 onwards, which respectively resembles that of pre-1979 and post-1979 policy of the G3. Our thesis examines the deformation of the bond yield curve over the last decade to evaluate monetary policy transmission mechanisms. While regulated interest rates can hamper the use of the yield curve as benchmark for pricing risk, the latter moves in line with the other instruments, the macroeconomic situation, and increasingly to central bank communication, a crucial step toward a market oriented system. Finally, US monetary policy significantly affects monetary policy determinants and transmission mechanisms in China, particularly from its WTO accession in 2001.
Author: The People's Bank of China (PBC) Publisher: ISBN: Category : Languages : en Pages : 4
Book Description
This paper briefly discusses the view of the People's Bank of China (PBC) on the spillover effects of the monetary policies of advanced economies and on the policy responses of emerging market economies. The paper also explains China's policy measures to combat these spillover effects, and calls for closer international policy coordination and cooperation.Full publication: "http://ssrn.com/abstract=2498104" target="_blank" The Transmission of Unconventional Monetary Policy to the Emerging Markets.
Author: Wei Liao Publisher: International Monetary Fund ISBN: 1484366298 Category : Business & Economics Languages : en Pages : 24
Book Description
China has been moving to a more market oriented financial system, which has implications for the monetary policy environment. The paper investigates the stability of the money demand function (MDF) in light of progress in financial sector reforms that, for example, have resulted in significant financial innovation (so-called shadow banking) and more liberalized interest rates. The analysis of international experience suggests that rapid development of the financial system often leads to structural shifts in the MDF. For example, financial innovation and liberalization alter the sensitivity of money balances to income and the interest rate. For China, we find that the stable long-run relationship between money demand, output, and interest rates that existed between 2002 and 2008 disappears after 2008. This coincides with the period of rapid financial innovation, especially the growth in off-balance sheet and nonbank financial intermediation. The results suggest that usefulness of M2 as an intermediate monetary target has declined with financial innovation and reform. A result that underscores the importance of moving toward increased reliance on more price-based targets such as interest rates.
Author: Bernard Laurens Publisher: International Monetary Fund ISBN: Category : Business & Economics Languages : en Pages : 58
Book Description
The People's Bank of China (PBC) has made great strides in modernizing its monetary policy frameworks but their effectiveness will diminish as the sophistication of the economy increases. Empirical evidence supports maintaining a reference to money in China's monetary strategy and enhancing the role of interest rates in its conduct. We advocate adoption of an eclectic strategy involving the monitoring of several indicators, and of a short-term interest rate as the operational target. The PBC should be granted discretion to change its policy rate, and there are no technical obstacles for such a move to occur in the near future.
Author: Miss Sonali Das
Author: Miss Sonali Das
Author: International Monetary Fund
Author: Michael McMahon
Author: Mr.Luis Brandao-Marques
Author: Hongyi Chen
Author: Wei Liu
Author: Sandrine Lunven
Author: The People's Bank of China (PBC)
Author: Wei Liao
Author: Bernard Laurens