IMF Working Papers

Monetary Policy Transmission and Policy Coordination in China

By Sonali Das, Wenting Song

April 29, 2022

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Format: Chicago

Sonali Das, and Wenting Song. Monetary Policy Transmission and Policy Coordination in China, (USA: International Monetary Fund, 2022) accessed November 8, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We study the transmission of conventional monetary policy in China, focusing on the interaction between monetary and fiscal policy given the unique institutional set-up for macroeconomic policy making. Our results suggest some progress but also continued difficulties in the transmission of monetary policy. Similar to recent studies, we find evidence of monetary policy pass-through to interest rates. However, the impact of monetary policy measures that are not coordinated with fiscal policy is significantly weaker than that of coordinated measures. This suggests the need for further improvements to the interest-rate based framework.

Subject: Central bank policy rate, Deposit rates, Financial services, Fiscal policy, Monetary policy, Monetary policy instruments, Yield curve

Keywords: Central bank policy rate, China, Deposit rates, Fiscal policy measure, Monetary fiscal coordination, Monetary policy, Monetary policy instruments, Monetary policy measure, Monetary policy pass-through, Monetary policy shock, Monetary policy transmission, Pass-through to interest rates, Textual analysis, Yield curve

Publication Details

  • Pages:

    40

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2022/074

  • Stock No:

    WPIEA2022074

  • ISBN:

    9798400206757

  • ISSN:

    1018-5941

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