Logo
Munich Personal RePEc Archive

A Narrative Indicator of Monetary Conditions in China

Sun, Rongrong (2015): A Narrative Indicator of Monetary Conditions in China.

[thumbnail of MPRA_paper_64166.pdf]
Preview
PDF
MPRA_paper_64166.pdf

Download (728kB) | Preview

Abstract

In this paper, we apply the narrative approach, studying the PBC's historical records, to infer policy-makers' intentions and thereby build a time series of monetary policy indicator. We show that our narrative policy indicator is informative about economic activity. Changes in it reflect the PBC's responses to its perceptions of economic conditions. It is a good indicator of monetary policy actions. Finally, we show that compared to monetary aggregates, changes in interest rates and the required reserve ratio are more associated with changes in monetary policy, as measured by our narrative indicator, but only to a limited degree. None of them alone can be a good proxy of policy indicator.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.