China: Macroeconomic Cycles in the 1980's

Hoe Ee Khor

No 1991/085, IMF Working Papers from International Monetary Fund

Abstract: This paper explores the links between reforms, macroeconomic management and the occurrence of macroeconomic instability in China during the last decade, drawing upon previous analytical work and also employing the “Granger causality” test. It is concluded that the cycles did not originate with the reforms; rather their characteristics were modified by structural changes in the economy. It is further argued that the incompleteness of reforms (which renders macroeconomic management difficult) had the effect of exacerbating the cycles by increasing their amplitude and frequency. Finally, results from the Granger tests suggest that broad money would be a good intermediate target for monetary policy.

Keywords: WP; People's Bank of China; broad money; monetary policy; price; PBC credit; credit policy; retail price index; monetary policy formulation; further price liberalization; establishment of the People's Bank of China; credit plan; two-tier price system; price reform; price system; price determination; price distortion; Monetary base; Inflation; Industrial production; Currencies; Imports (search for similar items in EconPapers)
Pages: 39
Date: 1991-09-01
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Citations: View citations in EconPapers (4)

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Journal Article: China--macroeconomic cycles in the 1980S (1992)
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