Capital controls and optimal Chinese monetary policy

• 成果类型: Article
• 署名作者: Chang, Chun; Liu, Zheng; Spiegel, Mark M.
• 署名单位: Shanghai Jiao Tong University; Federal Reserve System - USA
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2015.04.003
• 发表日期: 2015
• 页码: 1-15
• 关键词: china; sterilization; capital controls; Renminbi exchange rates; optimal policy

摘要

China's external policies, including capital controls, managed exchange rates, and sterilized interventions, constrain its monetary policy options for maintaining macroeconomic stability following external shocks. We study optimal monetary policy in a dynamic stochastic general equilibrium (DSGE) model that incorporates these Chinese characteristics. The model highlights a monetary policy tradeoff between domestic price stability and costly sterilization. The same DSGE framework allows us to evaluate the welfare implications of alternative liberalization policies. Capital account and exchange rate liberalization would have allowed the Chinese central bank to better stabilize the external shocks experienced during the global financial crisis. Published by Elsevier B.V.