Monetary Policy in China (1994-2004): Targets, Instruments and Their Effectiveness

Geiger, Michael

doi:10.2139/ssrn.898140

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Monetary Policy in China (1994-2004): Targets, Instruments and Their Effectiveness

Wuerzburg Economic Working Paper No. 68

69 Pages Posted: 25 Apr 2006

See all articles by Michael Geiger

Michael Geiger

affiliation not provided to SSRN

Date Written: April 2006

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 price-based indirect and 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 strategies, monetary policy instruments

JEL Classification: E52, E58

Suggested Citation: Suggested Citation

Geiger, Michael, Monetary Policy in China (1994-2004): Targets, Instruments and Their Effectiveness (April 2006). Wuerzburg Economic Working Paper No. 68, Available at SSRN: https://ssrn.com/abstract=898140 or http://dx.doi.org/10.2139/ssrn.898140