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Unconventional, conventional monetary policies, and optimal energy supply structure in China

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  • Jin, Yi
  • Wang, Shuo
  • Bu, Lin
  • Zhai, Pengxiang

Abstract

This work quantifies the macroeconomic effects of an unconventional monetary policy–targeted refinancing, and a conventional monetary policy–general refinancing on the optimization of the energy supply structure using a dynamic stochastic general equilibrium model. The results show that targeted refinancing exclusively increases bank loans to the green energy sector with lower interest rates, which promotes the energy transition. In contrast, with general refinancing, fossil energy loans increase significantly, leading to higher outputs, while green sector outputs are negatively impacted. Our findings provide novel evidence of the differential effects of unconventional and conventional monetary policies on the energy supply structure.

Suggested Citation

  • Jin, Yi & Wang, Shuo & Bu, Lin & Zhai, Pengxiang, 2023. "Unconventional, conventional monetary policies, and optimal energy supply structure in China," Finance Research Letters, Elsevier, vol. 54(C).
    • Handle: RePEc:eee:finlet:v:54:y:2023:i:c:s1544612323001058
    DOI: 10.1016/j.frl.2023.103732
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    Cited by:

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    2. Ren, Xiaohang & Yang, Wanping & Jin, Yi, 2024. "Geopolitical risk and renewable energy consumption: Evidence from a spatial convergence perspective," Energy Economics, Elsevier, vol. 131(C).
    3. Ma, Li & Li, Danna, 2024. "Would macro policy promote green and low-carbon transformation of energy companies?," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    4. Ren, Xiaohang & Xiao, Ya & Xiao, Shitong & Jin, Yi & Taghizadeh-Hesary, Farhad, 2024. "The effect of climate vulnerability on global carbon emissions: Evidence from a spatial convergence perspective," Resources Policy, Elsevier, vol. 90(C).
    5. Jin, Yi & Liu, Sinuo & Sun, Yongping & Fang, Jie, 2024. "Energy transition and housing market bubbles: Evidence from prefecture cities in China," Energy Economics, Elsevier, vol. 133(C).

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    Keywords

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    JEL classification:

    • 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
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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