The quantitative easing in China
Autor(a) principal: | |
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Data de Publicação: | 2016 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10071/13246 |
Resumo: | In this thesis we analyze the recent events in China, as far as the aggressive attitude of the Central Bank of China(People’s Bank of China, PBC in brief) is concerned towards avoiding the slowdown of the economy and the alleged possibility of its entry into deflation territory and the Zero Lower Bound. In the western way of looking into this problem, our major task is closely related to question whether Quantitative Easing (QE) in China seems to be (or no to be) of any usefulness at all. As we all know very well by now, many economists, top central banks officials, commentators and international institutions (like the IMF) are coming to realize the clear limits of monetary policy and QE in many developed western and Asian economies like Japan. After a long period having central banks creating money to unbelievable levels, many are now calling for the return of active fiscal policy. In our case, and using a linear VAR model, we can conclude in the opposite direction for the Chinese case. Using the multipliers associated with inflation, we can conclude that real variables (like residential investment) show a rather small positive cumulative impact upon inflation, while wealth variables (like the Stock Market Index) show a rather small negative impact. Instead, it is the creation of money (Monetary Base) that displays a huge impact upon inflation. If the Monetary Base increases (first difference of its logarithmic value) by one standard deviation, the change in the CPI will be increased by 14.53 after just nine quarters. Therefore, deflation and the stringent limitations of monetary policy in the Zero Lower Bound do not seem to be applying to the Chinese economy by now, as well as the near future is concerned. Obviously, we are not suggesting that, due to this result, active fiscal policy should not also be used in order to achieve the general goals of economic policy in China. |
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The quantitative easing in ChinaQuantitative EasingCentral BankChinaVAR modelPolítica monetáriaBanco centralInflaçãoAumento de capitalModelos VARIn this thesis we analyze the recent events in China, as far as the aggressive attitude of the Central Bank of China(People’s Bank of China, PBC in brief) is concerned towards avoiding the slowdown of the economy and the alleged possibility of its entry into deflation territory and the Zero Lower Bound. In the western way of looking into this problem, our major task is closely related to question whether Quantitative Easing (QE) in China seems to be (or no to be) of any usefulness at all. As we all know very well by now, many economists, top central banks officials, commentators and international institutions (like the IMF) are coming to realize the clear limits of monetary policy and QE in many developed western and Asian economies like Japan. After a long period having central banks creating money to unbelievable levels, many are now calling for the return of active fiscal policy. In our case, and using a linear VAR model, we can conclude in the opposite direction for the Chinese case. Using the multipliers associated with inflation, we can conclude that real variables (like residential investment) show a rather small positive cumulative impact upon inflation, while wealth variables (like the Stock Market Index) show a rather small negative impact. Instead, it is the creation of money (Monetary Base) that displays a huge impact upon inflation. If the Monetary Base increases (first difference of its logarithmic value) by one standard deviation, the change in the CPI will be increased by 14.53 after just nine quarters. Therefore, deflation and the stringent limitations of monetary policy in the Zero Lower Bound do not seem to be applying to the Chinese economy by now, as well as the near future is concerned. Obviously, we are not suggesting that, due to this result, active fiscal policy should not also be used in order to achieve the general goals of economic policy in China.Nesta tese analisamos os eventos recentes na China, na medida em que a atitude agressiva do Banco Central da China está em causa no sentido de evitar a desaceleração da economia, à alegada possibilidade de entrada em território deflacionário e à existência do limite inferior zero das taxas de juro. Na perspectiva ocidental de encarar este problema, a principal tarefa está intimamente relacionada com a questão se o alívio quantitativo (QE) na China parece ter (ou não) qualquer utilidade. Como se sabe, actualmente, muitos economistas, altos responsáveis dos bancos centrais, comentadores e instituições internacionais (como o FMI) estão a começar a perceber os limites da política monetária e do QE em muitas das economias desenvolvidas ocidentais e asiáticas como o Japão. Após um longo período do criação de dinheiro aténíveis inacreditáveis, pelos bancos centrais, muitos pedem agora o retorno da política fiscal ativa. No nosso estudo, utilizando um modelo VAR linear, concluimos o contrário para o caso chinês. Utilizando multiplicadores associados à inflação, constata-se que as variáveis reais (como o investimento residencial) mostram um pequeno impacto cumulativo positivo sobre a inflação, enquanto por sua vez, as variáveis riqueza (como o Índice da Bolsa) mostram um pequeno impacto negativo. Em vez disso, é a criação de dinheiro (Base Monetária) que exibe um impacto enorme sobre a inflação. Se a base monetária aumenta (primeira diferença do seu valor logarítmico) um desvio-padrão, o consequente aumento do IPC éde 14,53 em apenas nove trimestres. Assim, a deflação e as rigorosas limitações de política monetária no limite inferior zero não parecem ser aplicáveis à economia chinesa até ao momento, bem como no curto-prazo. Obviamente, não sugerimos que devido a este resultado, a política fiscal ativa também não deve ser utilizado, de modo a atingir os objetivos gerais da política económica chinesa.2017-05-08T13:43:11Z2016-11-23T00:00:00Z2016-11-232016-08info:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfapplication/octet-streamhttp://hdl.handle.net/10071/13246TID:201556880engNie, Dapenginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:48:20Zoai:repositorio.iscte-iul.pt:10071/13246Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:23:34.477900Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
The quantitative easing in China |
title |
The quantitative easing in China |
spellingShingle |
The quantitative easing in China Nie, Dapeng Quantitative Easing Central Bank China VAR model Política monetária Banco central Inflação Aumento de capital Modelos VAR |
title_short |
The quantitative easing in China |
title_full |
The quantitative easing in China |
title_fullStr |
The quantitative easing in China |
title_full_unstemmed |
The quantitative easing in China |
title_sort |
The quantitative easing in China |
author |
Nie, Dapeng |
author_facet |
Nie, Dapeng |
author_role |
author |
dc.contributor.author.fl_str_mv |
Nie, Dapeng |
dc.subject.por.fl_str_mv |
Quantitative Easing Central Bank China VAR model Política monetária Banco central Inflação Aumento de capital Modelos VAR |
topic |
Quantitative Easing Central Bank China VAR model Política monetária Banco central Inflação Aumento de capital Modelos VAR |
description |
In this thesis we analyze the recent events in China, as far as the aggressive attitude of the Central Bank of China(People’s Bank of China, PBC in brief) is concerned towards avoiding the slowdown of the economy and the alleged possibility of its entry into deflation territory and the Zero Lower Bound. In the western way of looking into this problem, our major task is closely related to question whether Quantitative Easing (QE) in China seems to be (or no to be) of any usefulness at all. As we all know very well by now, many economists, top central banks officials, commentators and international institutions (like the IMF) are coming to realize the clear limits of monetary policy and QE in many developed western and Asian economies like Japan. After a long period having central banks creating money to unbelievable levels, many are now calling for the return of active fiscal policy. In our case, and using a linear VAR model, we can conclude in the opposite direction for the Chinese case. Using the multipliers associated with inflation, we can conclude that real variables (like residential investment) show a rather small positive cumulative impact upon inflation, while wealth variables (like the Stock Market Index) show a rather small negative impact. Instead, it is the creation of money (Monetary Base) that displays a huge impact upon inflation. If the Monetary Base increases (first difference of its logarithmic value) by one standard deviation, the change in the CPI will be increased by 14.53 after just nine quarters. Therefore, deflation and the stringent limitations of monetary policy in the Zero Lower Bound do not seem to be applying to the Chinese economy by now, as well as the near future is concerned. Obviously, we are not suggesting that, due to this result, active fiscal policy should not also be used in order to achieve the general goals of economic policy in China. |
publishDate |
2016 |
dc.date.none.fl_str_mv |
2016-11-23T00:00:00Z 2016-11-23 2016-08 2017-05-08T13:43:11Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/masterThesis |
format |
masterThesis |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10071/13246 TID:201556880 |
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http://hdl.handle.net/10071/13246 |
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TID:201556880 |
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eng |
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eng |
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openAccess |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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