Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5087501 | Journal of Asian Economics | 2010 | 12 Pages |
Abstract
This paper adopts a four-equation New Keynesian model to evaluate the appropriateness of China's monetary policy framework. Our simulation results show that a hybrid rule that uses both interest rate and quantity of money as instruments outperforms the rules using one instrument alone at the current stage of economic and financial market development. Our analysis also shows that a sharp appreciation of the renminbi exchange rate, though effective in containing inflation pressures, would be quite disruptive to growth.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Li-gang Liu, Wenlang Zhang,