AbstractThe 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 07/14.
Date of creation: 01 Jan 2007
Date of revision:
Contact details of provider:
Postal: International Monetary Fund, Washington, DC USA
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-02 (All new papers)
- NEP-CBA-2007-06-02 (Central Banking)
- NEP-CNA-2007-06-02 (China)
- NEP-MAC-2007-06-02 (Macroeconomics)
- NEP-MON-2007-06-02 (Monetary Economics)
- NEP-SEA-2007-06-02 (South East Asia)
- NEP-TRA-2007-06-02 (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.:
- Estrella, Arturo & Mishkin, Frederic S., 1997.
"Is there a role for monetary aggregates in the conduct of monetary policy?,"
Journal of Monetary Economics,
Elsevier, vol. 40(2), pages 279-304, October.
- Arturo Estrella & Frederic S. Mishkin, 1996. "Is There a Role for Monetary Aggregates in the Conduct of Monetary Policy?," NBER Working Papers 5845, National Bureau of Economic Research, Inc.
- Eswar Prasad, 2004. "China's Growth and Integration into the World Economy," IMF Occasional Papers 232, International Monetary Fund.
- Nicholas R. Lardy, 2005. "Exchange Rate and Monetary Policy in China," Cato Journal, Cato Journal, Cato Institute, vol. 25(1), pages 41-47, Winter.
- Eswar Prasad & Qing Wang & Thomas Rumbaugh, 2005. "Putting the Cart Before the Horse? Capital Account Liberalization and Exchange Rate Flexibility in China," IMF Policy Discussion Papers 05/1, International Monetary Fund.
- Marvin Goodfriend & Eswar Prasad, 2007.
"A Framework for Independent Monetary Policy in China,"
CESifo Economic Studies,
CESifo, vol. 53(1), pages 2-41, March.
- Marvin Goodfriend & Eswar Prasad, 2006. "A Framework for Independent Monetary Policy in China," IMF Working Papers 06/111, International Monetary Fund.
- Bernard Laurens, 2005. "Monetary Policy Implementation at Different Stages of Market Development," IMF Occasional Papers 244, International Monetary Fund.
- Bruggeman, Annick & Camba-Méndez, Gonzalo & Fischer, Björn & Sousa, João, 2005. "Structural filters for monetary analysis: the inflationary movements of money in the euro area," Working Paper Series 0470, European Central Bank.
- Bindseil, Ulrich, 2004. "The operational target of monetary policy and the rise and fall of reserve position doctrine," Working Paper Series 0372, European Central Bank.
- Marc Quintyn & Bernard Laurens & Hassanali Mehran & Tom Nordman, 1996. "Monetary and Exchange System Reforms in China," IMF Occasional Papers 141, International Monetary Fund.
- Richard Podpiera, 2006. "Progress in China'S Banking Sector Reform," IMF Working Papers 06/71, International Monetary Fund.
- Shujie Yao & Dan Luo & Lixia Loh, . "On China’s Monetary Policy and Asset Prices," Discussion Papers 11/04, University of Nottingham, GEP.
- Zhang, Wenlang, 2009. "China's monetary policy: Quantity versus price rules," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 473-484, September.
- Koivu, Tuuli, 2012. "Monetary policy, asset prices and consumption in China," Economic Systems, Elsevier, vol. 36(2), pages 307-325.
- Julien Fouquau & Anne-Laure Delatte, 2010.
"Smooth transition in China: New evidence in the cointegrating money demand relationship,"
- Anne laure Delatte & Julien Fouquau, 2010. "Smooth transition in China: New evidence in the cointegrating money demand relationship," Economics Bulletin, AccessEcon, vol. 30(1), pages 265-273.
- He, Dong & Wang, Honglin, 2011.
"Dual-track interest rates and the conduct of monetary policy in China,"
BOFIT Discussion Papers
21/2011, Bank of Finland, Institute for Economies in Transition.
- He, Dong & Wang, Honglin, 2012. "Dual-track interest rates and the conduct of monetary policy in China," China Economic Review, Elsevier, vol. 23(4), pages 928-947.
- Dong He & Honglin Wang, 2011. "Dual-Track Interest Rates and the Conduct of Monetary Policy in China," Working Papers 212011, Hong Kong Institute for Monetary Research.
- Koivu, Tuuli, 2008. "Has the Chinese economy become more sensitive to interest rates? Studying credit demand in China," BOFIT Discussion Papers 1/2008, Bank of Finland, Institute for Economies in Transition.
- Robert Lafrance, 2008. "China's Exchange Rate Policy: A Survey of the Literature," Discussion Papers 08-5, Bank of Canada.
- International Monetary Fund, 2009. "What Drives China's Interbank Market?," IMF Working Papers 09/189, International Monetary Fund.
- Koivu, Tuuli, 2009. "Has the Chinese economy become more sensitive to interest rates? Studying credit demand in China," China Economic Review, Elsevier, vol. 20(3), pages 455-470, September.
- Liu, Li-gang & Zhang, Wenlang, 2010. "A New Keynesian model for analysing monetary policy in Mainland China," Journal of Asian Economics, Elsevier, vol. 21(6), pages 540-551, December.
- Dong He & Laurent L. Pauwels, 2008.
"What Prompts the People's Bank of China to Change Its Monetary Policy Stance? Evidence from a Discrete Choice Model,"
China & World Economy,
Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(6), pages 1-21.
- Dong He & Laurent Pauwels, 2008. "What Prompts the People's Bank of China to Change its Monetary Policy Stance? Evidence from a Discrete Choice Model," Working Papers 0806, Hong Kong Monetary Authority.
- Pang, Iris Ai Jao, 2010. "Comparisons of different monetary policies in China with yield curve information," MPRA Paper 32494, University Library of Munich, Germany.
- repec:ebl:ecbull:v:30:y:2010:i:1:p:265-273 is not listed on IDEAS
- Nagayasu, Jun, 2009. "Regional Inflation in China," MPRA Paper 24722, University Library of Munich, Germany.
- Petreski, Marjan & Jovanovic, Branimir, 2012. "New Approach to Analyzing Monetary Policy in China," MPRA Paper 40497, University Library of Munich, Germany.
- Bernard Laurens & Martin Sommer & Marco Arnone & Jean-FranÃ§ois Segalotto, 2007. "Central Bank Autonomy," IMF Working Papers 07/88, International Monetary Fund.
- Dong He & Frank Leung & Philip Ng, 2007. "How Do Macroeconomic Developments in Mainland China Affect Hong Kong's Short-term Interest Rates?," Working Papers 0717, Hong Kong Monetary Authority.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).
If references are entirely missing, you can add them using this form.