Model Structure and the Combined Welfare and Trade Effects of China's Trade Related Policies

×

Error message

  • Deprecated function: Function create_function() is deprecated in require_once() (line 591 of /var/www/eaber.org/includes/cache.inc).
  • Deprecated function: Function create_function() is deprecated in require_once() (line 591 of /var/www/eaber.org/includes/cache.inc).
Author: 
Wang Yongzhong
Description: 
International Trade and Investment Series
JEL codes: 
Abstract: 
In recent years, China has faced an increasing trilemmahow to maintain independent monetary policy and limit exchange rate flexibility simultaneously, while at the same time facing persistent and substantial international capital flows. This paper undertakes an empirical investigation to evaluate the effectiveness of Chinas sterilizations and capital mobility regulations, measured by the sterilization and offset coefficients respectively, using monthly data between mid 1999 and March 2009. We find that the effectiveness of Chinas sterilization is almost perfect in terms of the monetary base, while it is nearly half in light of M2, and the extent of Chinas capital mobility regulations still works but not well binds. Recursive estimation finds evidence of increasing mobility of capital flows and decreasing extent of sterilizations that may undercut Chinas ability to seek monetary autonomy and domestic currency stability simultaneously.
Error | EABER

Error

The website encountered an unexpected error. Please try again later.