Open Access BASE2012
Financial system reforms and China's monetary policy framework: A DSGE-based assessment of initiatives and proposals
Abstract
This paper evaluates various financial system reform initiatives and proposals in China in a DSGE modelling setting. The key reform steps analysed include phasing out benchmark interest rates, deepening the direct finance market, reducing government's quantity-based intervention on financial institutions. Our counterfactual model simulation results suggest that the reforms will be beneficial only, if Chinese monetary policy continues to rely on quantity-based interventions on financial institutions or tightens the interest rate rule.
Themen
Sprachen
Englisch
Verlag
Helsinki: Bank of Finland, Institute for Economies in Transition (BOFIT)
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