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Monetary policy, asset prices and consumption in China

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  • Koivu, Tuuli

Abstract

This paper studies the wealth channel in China. Using the structural vector autoregression method, we find that a loosening of China.s monetary policy indeed leads to higher asset prices, which in turn are linked to household consumption. However, the importance of the wealth channel as a part of the monetary policy transmission mechanism in China is still limited.

Suggested Citation

  • Koivu, Tuuli, 2010. "Monetary policy, asset prices and consumption in China," BOFIT Discussion Papers 18/2010, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2010_018
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    Cited by:

    1. Yu-Fu Chen & Michael Funke & Aaron Mehrotra, 2017. "What Drives Urban Consumption in Mainland China? The Role of Property Price Dynamics," Pacific Economic Review, Wiley Blackwell, vol. 22(3), pages 383-409, August.

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    More about this item

    Keywords

    China; monetary policy; asset prices;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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