Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240363 
Year of Publication: 
2020
Series/Report no.: 
BOFIT Discussion Papers No. 12/2020
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
The People's Bank of China (PBoC) has taken numerous measures to cushion the impacts of the COVID-19 health crisis on the Chinese economy. As the current monetary policy framework features a multi-instrument mix of liquidity tools and pricing signals, we employ a dynamic-factor modeling approach to derive an indicator of China's monetary policy stance. Our approach assumes that comovements of several monetary policy instruments share a common element that can be captured by an underlying unobserved component. We use the derived indicator to trace the response of the PBoC to the coronavirus pandemic. The estimates reveal that the PBoC has implement novel policy measures to ensure that commercial banks maintain liquidity access and credit provision during the COVID-19 crisis.
Subjects: 
corona pandemic
COVID-19
China
monetary policy
dynamic factor model
JEL: 
C54
E32
E52
I15
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-331-7
Document Type: 
Working Paper

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