BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
Financial system reforms and China’s monetary policy framework: A DSGE-based assessment of initiatives and proposals
() and Michael Paetz
Abstract: This paper evaluates various financial system reform
initiatives and proposals in China in a DSGE modelling setting. The key
reform steps analysed include phasing out benchmark interest rates,
deepening the direct finance market, reducing government’s quantity-based
intervention on financial institutions. Our counterfactual model simulation
results suggest that the reforms will be beneficial only, if Chinese
monetary policy continues to rely on quantity-based interventions on
financial institutions or tightens the interest rate rule.
Keywords: DSGE model; financial sector reform; monetary policy; China; (follow links to similar papers)
JEL-Codes: E42; E52; E58; (follow links to similar papers)
36 pages, December 11, 2012
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Päivi Määttä ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom