Chinese monetary expansion and the U.S. economy: A note‎

Joaquin Vespignani and Ronald Ratti

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the influence of monetary shocks in China on the U.S. economy over ‎‎1996-2012. The influence on the U.S. is through the sheer scale of China’s growth through ‎effects in demand for imports, particularly that of commodities. China’s growth influences ‎world commodity/oil prices and this is reflected in significantly higher inflation in the U.S. ‎China’s monetary expansion is also associated with significant decreases in the trade ‎weighted value of the U.S. dollar that is due to the operation of a pegged currency. China ‎manages the exchange rate and has extensive capital controls in place. In terms of the ‎Mundell–Fleming model, with imperfect capital mobility, sterilization actions under a ‎managed exchange rate permit China to pursue an independent monetary policy with ‎consequences for the U.S.‎

Keywords: International monetary transmission; China’s monetary aggregates (search for similar items in EconPapers)
JEL-codes: E0 E4 E41 F4 F41 (search for similar items in EconPapers)
Date: 2013-05-01
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/46961/1/MPRA_paper_46961.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/48500/1/MPRA_paper_46961.pdf revised version (application/pdf)

Related works:
Working Paper: Chinese monetary expansion and the U.S. economy (2013)
Working Paper: Chinese monetary expansion and the U.S. economy (2013)
Working Paper: Chinese Monetary Expansion and the US Economy (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46961

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().