Money, Price and Causality in Mainland China

Mohammad S. Hasan
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Mohammad S. Hasan: Professor of School of Financial Studies and Law, Sheffield Hallam University, City Campus, Pond Street, Sheffield

Bangladesh Development Studies, 1997, vol. 25, issue 1-2, 143-158

Abstract: The identification of the existence of a causal relationship between monetary aggregates and prices in mainland China has been the subject of considerable debate among researchers. For example, Chow (1987) contends that quantity theory of money provides a plausible explanation of underlying price movements in China over the period 1952-83. The empirical work of Blejer et aí., (1991) on the money demand function in the post-reform period (1983QI-1988QIII) documented the existence of a relatively stable relationship between a range of monetary aggregates, inflation and real income. In contrast Peebles (1992), while recognizing the institutional differences of the Chinese economy from other highly developed market economies, argues that quantity theory is of no help in understanding the historical association between money and prices in China

Keywords: Causality; Money supply; Stock prices; Monetary aggregates; Market prices; Budget deficits; Development studies (search for similar items in EconPapers)
JEL-codes: A12 (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:ris:badest:0373

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