Monetary Policy Transmission and Policy Coordination in China

Author/Editor:

Miss Sonali Das ; Wenting Song

Publication Date:

April 29, 2022

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We study the transmission of conventional monetary policy in China, focusing on the interaction between monetary and fiscal policy given the unique institutional set-up for macroeconomic policy making. Our results suggest some progress but also continued difficulties in the transmission of monetary policy. Similar to recent studies, we find evidence of monetary policy pass-through to interest rates. However, the impact of monetary policy measures that are not coordinated with fiscal policy is significantly weaker than that of coordinated measures. This suggests the need for further improvements to the interest-rate based framework.

Series:

Working Paper No. 2022/074

Frequency:

regular

English

Publication Date:

April 29, 2022

ISBN/ISSN:

9798400206757/1018-5941

Stock No:

WPIEA2022074

Pages:

40

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