IS U.S. MONEY CAUSING CHINA'S OUTPUT?
Anders Johansson ()
No 2009-6, Working Paper Series from Stockholm School of Economics, China Economic Research Center
This paper tries to answer the long-standing question of whether money causes output. Instead of focusing on domestic monetary policy and output, we analyze U.S. monetary policy and its possible effects on real output in China. Our results indicate that the main monetary instrument in the U.S., the Federal Fund Rate, Granger causes China’s output. A second monetary variable, U.S. money supply, does not seem to have a significant effect on China’s output. The results are supported by variance decompositions, which indicate that Federal Fund Rate shocks have an effect on China’s real output. The findings have important implications for policy makers in China that focus on maintaining a high and stable economic growth.
Keywords: China; United States; Monetary policy; Output; Causality; VECM (search for similar items in EconPapers)
JEL-codes: C32 E40 E51 E52 E58 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2009-03-15, Revised 2009-05-15
New Economics Papers: this item is included in nep-cba, nep-cna, nep-fdg, nep-mac, nep-mon and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Forthcoming in China Economic Review.
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: Is U.S. money causing China's output? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hhs:hacerc:2009-006
Access Statistics for this paper
More papers in Working Paper Series from Stockholm School of Economics, China Economic Research Center China Economic Research Center, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Malin Nilsson ( this e-mail address is bad, please contact ).