Effects and Conduct of Macroprudential Policy in China

Soyoung Kim, Seri Shim and Hongyi Chen

Journal of Financial Stability, 2023, vol. 66, issue C

Abstract: This paper investigates the effects and conduct of macroprudential policies in China compared to those of monetary policy. Two types of structural VAR models, one with recursive zero restrictions and the other with sign restrictions on impulse responses, are used with monthly data. The main results of this paper are as follows. First, macroprudential policy has substantial effects on financial variables such as credit and house prices and macro variables such as output and inflation rate, as monetary policy does. Second, contractionary macroprudential policy is taken to stabilize credit in response to credit shocks, but monetary policy is not.

Keywords: Macroprudential policy; Monetary policy; VAR; Sign restriction; China (search for similar items in EconPapers)
JEL-codes: E58 E61 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:66:y:2023:i:c:s1572308923000244

DOI: 10.1016/j.jfs.2023.101124

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