Empirical Analysis on Monetary Policy Efficiency in China
- 10.2991/iaw-sc.2013.66How to use a DOI?
- Monetary policy efficiency; Monetary policy targets; SFA
As an important indicator to test the effectiveness of monetary policy, monetary policy efficiency has long been discussed. In this paper, we adopt the stochastic frontier analysis (SFA) based on translog function to measure the Chinese monetary policy efficiency from 1998 to 2011. Our empirical results indicate that economic growth and price stability have the same weights in the Chinese monetary policy function. Money aggregate (M2) has a larger impact on the monetary policy targets than interest rate does. Generally speaking, Chinese monetary policy efficiency is not so high and needs to be improved. To enhance monetary policy efficiency, China should reform its monetary policy framework by introducing the flexible targets into the monetary policy framework, further the interest rate reform and continue the reform on the Renminbi exchange rate regime.
- © 2013, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Wan Jieqi AU - Gui Cheng AU - Tao Xu PY - 2013/10 DA - 2013/10 TI - Empirical Analysis on Monetary Policy Efficiency in China BT - Proceedings of the 2013 International Academic Workshop on Social Science PB - Atlantis Press SP - 308 EP - 311 SN - 1951-6851 UR - https://doi.org/10.2991/iaw-sc.2013.66 DO - 10.2991/iaw-sc.2013.66 ID - Jieqi2013/10 ER -