Arbeitspapier

Trilemma challenges for the People's Republic of China

This paper first reviews recent developments in exchange rate regimes, capital account liberalization, interest rate liberalization, and monetary policymaking in the People's Republic of China (PRC). It then observes that the PRC's monetary policy autonomy may have been reduced with falling capital control effectiveness and a rigid exchange regime that is still tightly managed against the United States ( US ) dollar. This hypothesis is investigated empirically using both the Taylor rule and the McCallum-like rule to test whether the PRC's money market interest rate and/or quantity of money supply are being increasingly influenced by the US interest rate or reserve accumulation. The paper concludes that there is considerable evidence suggesting diminishing monetary policy autonomy in the PRC. To regain policy autonomy, the monetary authority needs to substantially increase exchange rate flexibility of the renminbi as long as it continues to pursue capital account opening.

Sprache
Englisch

Erschienen in
Series: ADBI Working Paper ; No. 513

Klassifikation
Wirtschaft
Monetary Policy
Central Banks and Their Policies
Thema
trilemma challenges
exchange rate regimes
monetary policy autonomy
peoples republic of china
taylor rule
mccallum rule

Ereignis
Geistige Schöpfung
(wer)
Kawai, Masahiro
Liu, Li-Gang
Ereignis
Veröffentlichung
(wer)
Asian Development Bank Institute (ADBI)
(wo)
Tokyo
(wann)
2015

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Kawai, Masahiro
  • Liu, Li-Gang
  • Asian Development Bank Institute (ADBI)

Entstanden

  • 2015

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