To guide or not to guide? Quantitative monetary policy tools and macroeconomic dynamics in China
Ivan Lozev and
Andrew Tsang ()
No 3/2017, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition
This paper discusses the macroeconomic effects of China’s informal banking regulatory tool “win-dow guidance,” introduced in 1998. Using an open-economy DSGE model that includes the com-mercial banking sector, we study the stabilizing effects of this non-standard quantitative monetary policy tool and the implications of quantity-based vs. price-based monetary policy instruments for welfare. The analyses are relevant to the current overhaul of Chinese monetary policy.
JEL-codes: C61 E32 E44 E52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-cna, nep-dge, nep-mac, nep-mon and nep-tra
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Published in Forthcoming in International Journal of Central Banking
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Persistent link: https://EconPapers.repec.org/RePEc:bof:bofitp:2017_003
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