Monetary policy and the over-investment cycle: China as an extreme case

Daniel Gros

CEPS Papers from Centre for European Policy Studies

Abstract: Against the background of the severe turbulence that is hitting global stock markets, Daniel Gros examines the looming slowdown in the Chinese economy in this CEPS Commentary, which he attributes to an underlying ‘real’ domestic investment/savings imbalance. Given the magnitude of this imbalance, Gros thinks it is unlikely to be solved by monetary policy and that the best that can be hoped for is that the central banks will manage to ‘paper over’ some of the unavoidable symptoms in credit markets.

Pages: 4 pages
Date: 2015-09
New Economics Papers: this item is included in nep-cna, nep-mac, nep-mon and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:eps:cepswp:10861

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