Output and Price Fluctuations in China's Reform Years: What Role did Money Play?

Yin Zhang () and Guanghua Wan

No RP2004-56, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The Chinese economy underwent cyclical fluctuations in growth and inflation in the reform period. Contrasting views exist on the role of money in such fluctuations. This paper assesses these views employing structural VEC models based on the exchange equation. It is found that in the long run money accommodates, rather than causes, changes in output and prices. In the short run, price fluctuations are mostly attributable to shocks that have permanent effects on prices and money but not on real output.

Keywords: Business cycles; Interest rate; Econometric models (Macroeconomics); Prices (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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