Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212678
Authors: 
Mehrotra, Aaron
Sánchez-Fung, José R.
Year of Publication: 
2010
Series/Report no.: 
BOFIT Discussion Papers 10/2010
Abstract: 
The paper models monetary policy in China using a hybrid McCallum-Taylor empirical reaction function. The feedback rule allows for reactions to inflation and output gaps, and to developments in a trade-weighted exchange rate gap measure. The investigation finds that monetary policy in China has, on average, accommodated inflationary developments. But exchange rate shocks do not significantly affect monetary policy behavior, and there is no evidence of a structural break in the estimated reaction function at the end of the strict dollar peg in July 2005. The paper also runs an exercise incorporating survey-based inflation expectations into the policy reaction function and meets with some success.
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-685-9
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.