Market and Non-Market Monetary Policy Tools in a Calibrated DSGE Model for Mainland China
AbstractMonetary policy in mainland China differs from conventional central bank- ing in several respects. The central bank regulates retail lending and deposit rates, influences the credit supply via window guidance, and, in recent years has even used the required reserve ratio as a tool for fine-tuning monetary pol- icy. This paper develops a New Keynesian DSGE model to captures China’s unconventional monetary policy toolkit. We find that credit quotas are impor- tant as the interest-rate corridor distorts the efficient reactions of the economy. Moreover, for China’s central bankers the choice of a particular monetary pol- icy tool or a the appropriate combination of instruments depends on the source of the shock.
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Bibliographic InfoPaper provided by Hamburg University, Department of Economics in its series Quantitative Macroeconomics Working Papers with number 21207.
Date of creation: Jul 2012
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More information through EDIRC
DSGE models; monetary policy; China; macroprudential policy;
Other versions of this item:
- Chen, Qianying & Funke, Michael & Paetz, Michael, 2012. "Market and Non-Market Monetary Policy Tools in a Calibrated DSGE Model for Mainland China," BOFIT Discussion Papers 16/2012, Bank of Finland, Institute for Economies in Transition.
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-08-23 (All new papers)
- NEP-DGE-2012-08-23 (Dynamic General Equilibrium)
- NEP-MAC-2012-08-23 (Macroeconomics)
- NEP-MON-2012-08-23 (Monetary Economics)
- NEP-TRA-2012-08-23 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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