Effective Research on China's Monetary Policy

Author: Wang Hongju
Publisher:
Publish Date: 2003-05-16
Features: The effectiveness of monetary policy is a complex and widely discussed issue. There has been a substantial body of literature, both domestic and international, conducting theoretical and empirical analyses on this topic. Based on the existing literature and considering the institutional constraints during China's economic transition, the author of this book analyzes the changes in the effectiveness of China's monetary policy after the reform and opening-up. Through extensive empirical analyses, the book explores the impact of various factors on China's monetary policy effectiveness, including the uncertainty of the aggregate supply curve, the low interest rate elasticity of aggregate demand, the instability of money demand, the endogeneity of money supply, the inefficient transmission mechanism of monetary policy, the limited independence of the central bank, the multi-objective constraints of monetary policy, the failure of intermediate targets and policy instruments, and the uncertainty of monetary policy rules. The book also conducts exploratory research on several aspects, such as the guiding significance of the aggregate supply curve for monetary policy operations, the and practical challenges of inflation targeting for China, the measurement of the independence of the People's Bank of China, and the basic money rule and rediscount rate rule in China. The author advocates for the implementation of a cautious monetary policy that is both preventive and forward-looking.