The Leading eBooks Store Online 4,272,009 members ⚫ 1,419,367 ebooks

New to eBooks.com?

Learn more

Broad Money Demand and Asset Substitution in China

Broad Money Demand and Asset Substitution in China by Ge Wu
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
Recent changes to China's financial system, in particular ongoing interest rate liberalization, gradual movement toward a more flexible exchange rate regime, and rapid development of capital markets, have changed substantially the environment in which monetary policy operates. In light of these changes, we estimate an error correction model using a General-to-Specific methodology and confirm that a stable broad money demand function exists taking proper account of asset substitution, with an income elasticity of less than unity. Current inflation is found to have a significant negative impact on the real money demand. However, money demand does not appear very sensitive to interest rates, possibly reflecting their partial liberalization. Changes in the exchange rate also do not affect money demand significantly, but expectations of a further renminbi appreciation since 2005 appears to induce more money demand. Stock prices are statistically insignificant despite recent investors' interest in equity markets.
International Monetary Fund; June 2009
30 pages; ISBN 9781452751078
Read online, or download in secure EPUB or secure PDF format
Title: Broad Money Demand and Asset Substitution in China
Author: Ge Wu
 
ISBNs
1451917074
9781451872781
9781451917079
9781452751078