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Effectiveness of Monetary Policy and the Growth of Industrial Sector in China

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  • Adebayo Augustine Kutu
  • Ntokozo Patrick Nzimande
  • Simiso Msomi

Abstract

China is viewed as the pillar of Emerging Market Economies (EMEs), deems to surpassed United State, and become the topmost industrialized country in the world with the prospects of major shift in the future world power. However, growth rate has slow down since the third quarter of 2014. Through this paper, we aim at investigating the impacts of monetary policy on industrial sector growth, and determine whether the long-run industrial sector growth in China can be foster by the effectiveness of monetary policy. It also examines the interrelationships among the variables employed and determines the steady-state relationships between industrial sector growth and monetary policy. Time-series econometric techniques such as unit roots, ARDL and ECM are employed to monthly data for the year 1994:1 to 2013:12.According to the empirical results derived, the effectiveness of monetary policy significantly affects industrial sector growth and the short-run impact of monetary policy on industrial output production is established.

Suggested Citation

  • Adebayo Augustine Kutu & Ntokozo Patrick Nzimande & Simiso Msomi, 2017. "Effectiveness of Monetary Policy and the Growth of Industrial Sector in China," Journal of Economics and Behavioral Studies, AMH International, vol. 9(3), pages 46-59.
  • Handle: RePEc:rnd:arjebs:v:9:y:2017:i:3:p:46-59
    DOI: 10.22610/jebs.v9i3.1745.g1443
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    References listed on IDEAS

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