A New Keynesian Model for Analysing Monetary Policy in Mainland China
AbstractThis paper adopts a three-equation New Keynesian model to evaluate the appropriateness of China's monetary policy framework. Our simulation results show that a hybrid rule that relies on both interest rate and quantity of money to conduct monetary policy appears to be more suitable than its alternatives at the current stage of economic and financial market development. Our simulation results also show that a sharp appreciation of the renminbi exchange rate would be disruptive to the inflation and output processes of the economy, despite its effectiveness in curbing inflation.
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Bibliographic InfoPaper provided by Hong Kong Monetary Authority in its series Working Papers with number 0718.
Length: 26 pages
Date of creation: Nov 2007
Date of revision:
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More information through EDIRC
Monetary Policy Rule; New Keynesian Model; China;
Find related papers by JEL classification:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-31 (All new papers)
- NEP-CBA-2008-05-31 (Central Banking)
- NEP-CNA-2008-05-31 (China)
- NEP-MAC-2008-05-31 (Macroeconomics)
- NEP-MON-2008-05-31 (Monetary Economics)
- NEP-TRA-2008-05-31 (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.:
- Svensson, Lars E O, 1998.
"Inflation Targeting as a Monetary Policy Rule,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
1998, C.E.P.R. Discussion Papers.
- Svensson, Lars E. O., 1998. "Inflation targeting as a monetary policy rule," CFS Working Paper Series, Center for Financial Studies (CFS) 1998/16, Center for Financial Studies (CFS).
- Lars E.O. Svensson, 1998. "Inflation Targeting as a Monetary Policy Rule," NBER Working Papers 6790, National Bureau of Economic Research, Inc.
- Svensson, L.E.O., 1998. "Inflation Targeting as a Monetary Policy Rule," Papers, Stockholm - International Economic Studies 646, Stockholm - International Economic Studies.
- Svensson, Lars E.O., 1998. "Inflation Targeting as a Monetary Policy Rule," Seminar Papers, Stockholm University, Institute for International Economic Studies 646, Stockholm University, Institute for International Economic Studies.
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