Download This PaperInstruments of Monetary Policy in China and Their Effectiveness: 1994-2006
UNCTAD Discussion Paper No. 187
52 Pages Posted: 23 Jun 2008
Date Written: February 1, 2008
Abstract
China's monetary policy disposes of two sets of monetary policy instruments: Instruments of the central bank, the People's Bank of China (PBC) and non-monetary policy instruments. Additionally, the PBC's instruments include (i) price-based indirect; and (ii) quantity-based direct instruments. The simultaneous usage of these instruments leads to various distortions that ultimately prevent the interest rate channel of monetary transmission from functioning. Moreover, the strong influences of quantity-based direct instruments and non-monetary policy instruments question the approach of indirect monetary policy in general.
Keywords: China, Monetary Policy, Monetary Policy Instruments
JEL Classification: E52, E58
Suggested Citation: Suggested Citation
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