Vespignani, Joaquin L. and Ratti, Ronald A (2013): Chinese monetary expansion and the U.S. economy.
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Abstract
This paper examines the influence of monetary shocks in China on the U.S. economy over 1996-2012. The influence on the U.S. is through the sheer scale of China’s growth through effects in demand for imports, particularly that of commodities. China’s growth influences world commodity/oil prices and this is reflected in significantly higher inflation in the U.S. China’s monetary expansion is also associated with significant decreases in the trade weighted value of the U.S. dollar that is due to the operation of a pegged currency. China manages the exchange rate and has extensive capital controls in place. In terms of the Mundell–Fleming model, with imperfect capital mobility, sterilization actions under a managed exchange rate permit China to pursue an independent monetary policy with consequences for the U.S.
| Item Type: | MPRA Paper |
|---|---|
| Original Title: | Chinese monetary expansion and the U.S. economy |
| English Title: | Chinese monetary expansion and the U.S. economy |
| Language: | English |
| Keywords: | International monetary transmission, U.S. Macroeconomics, China’s monetary policy |
| Subjects: | E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E42 - Monetary Systems ; Standards ; Regimes ; Government and the Monetary System ; Payment Systems E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E50 - General E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies |
| Item ID: | 48974 |
| Depositing User: | Joaquin L. Vespignani |
| Date Deposited: | 09 Aug 2013 06:02 |
| Last Modified: | 27 Sep 2019 09:52 |
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| URI: | https://mpra.ub.uni-muenchen.de/id/eprint/48974 |
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