Chinese monetary policy and the dollar peg
Reade, J. James ;  Volz, Ulrich ;  ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titleChinese monetary policy and the dollar peg
AuthorReade, J. James
AuthorVolz, Ulrich
EditorUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages27 S.
Series ; 2010,35 : Economics
KeywordsChinese monetary policy; monetary independence; cointegration
Classification (DDC)337 International economics
AbstractThis paper investigates to what extent Chinese monetary policy is constrained by the dollar peg. To this end, we use a cointegration framework to examine whether Chinese interest rates are driven by the Fed’s policy. In a second step, we estimate a monetary model for China, in which we include also other monetary policy tools besides the central bank interest rate, namely reserve requirement ratios and open market operations. Our results suggest China has been relatively successful in isolating its monetary
policy from the US policy and that the interest rate tool has not been effectively made use of. We therefore conclude that by employing capital controls and relying on other instruments than the interest rate China has been able to exert relatively autonomous monetary policy.
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FU DepartmentDepartment Business and EconomicsInstitute for Latin American Studies
Year of publication2010
Type of documentBook
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Created at2010-12-21 : 07:24:12
Last changed2016-01-05 : 02:38:22
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000008919