Demand for Money in Transition: Evidence from China’s Disinflation

Mehrotra, Aaron

doi:10.1007/s11294-007-9129-4

Cited by 16 publications

(6 citation statements)

References 30 publications

(30 reference statements)

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“…Mehrotra (2008) also shows how shocks to real M2 lead to increases in CPI inflation in the Mainland.BOFIT-Institute for Economies in Transition Bank of Finland BOFIT Discussion Papers 5/…”

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confidence: 92%

The Impact of Chinese Monetary Policy Shocks on East Asia

Koźluk

Mehrotra

2008

SSRN Journal

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We study the effects of Chinese monetary policy shocks on China's major trading partners in East Asia by estimating structural vector autoregressive (SVAR) models for six economies in the region. We find that a monetary expansion in Mainland China leads to an increase in real GDP (temporary) and the price level (permanent) in a number of economies in our sample, most notably in Hong Kong and the Philippines. The impact could result from intertemporal substitution present in a general equilibrium framework which allows for positive domestic impacts of foreign monetary expansions. Our results emphasize the growing importance of China for its neighboring economies and the significance of Chinese shocks for the design of monetary policy in Asian economies.

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“…Mehrotra (2008) also shows how shocks to real M2 lead to increases in CPI inflation in the Mainland.BOFIT-Institute for Economies in Transition Bank of Finland BOFIT Discussion Papers 5/…”

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confidence: 92%

The Impact of Chinese Monetary Policy Shocks on East Asia

Koźluk

Mehrotra

2008

SSRN Journal

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“…Aaron Mehrotra (2006) examines the demand for broad money M2 in the Chinese economy and found a stable money demand relationship in a vector error correction framework, together with increased inflation led by the shocks of broad money observation. Aaron Mehrotra (2006) Hsing, Y (2007) finds the log linear transformation estimation of money demand function which is positively related with GDP and currency appreciation, and negatively related by domestic interest rate and foreign interest rate, is better estimation than linear and Box-Cox transformation.…”

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confidence: 99%

Estimating a Function of Real Demand for Money in Pakistan: An Application of Bounds Testing Approach to Cointegration

Mall¹

2013

IJCA

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This paper attempts to model a real demand for money function of Pakistan. For this purpose we apply bounds test based cointegration technique using the time series data for the period 1973 to 2010. Our findings included three determinants: 1) real income and 2) foreign exchange contain positive relation as well as for both long run and short run dynamics they are the most significant factors of real demand for money. While we found real demand for money is negatively affected by 3) call money rate (is proxied by interest on deposit). However being in a short-run dynamic specification, money demand is found important with the elasticities of real income, exchange rate and call money rate being much smaller in the short-run than in long-run. Stability tests of the paper do not show any serious structural change in the model. As for both CUSUMSQ and CUSUM statistics, showing the critical value line within the bounds that present the model is stable. This model strongly recommends the real demand for M2 is an important monetary aggregate in terms of policy implications of our results including the suitability of the model in Pakistan. Keywords 1) Real income 2) Foreign exchange rate 3) Call money rate 4) Call money rates 5) Interest rate 6) Autoregressive distributed lag (ARDL) 7) GDP deflator 8)

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“…Mehrotra (2008) also shows how shocks to real M2 lead to increases in CPI inflation in the Mainland.…”

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confidence: 93%

The impact of Chinese monetary policy shocks on East and South‐East Asia¹

Koluk¹,

Mehrotra²

2008

Economics of Transition

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We study the effects of Chinese monetary policy shocks on China's major trading partners in East and South-East Asia by estimating structural vector autoregressive (SVAR) models for six economies in the region. We find that a monetary expansion in Mainland China leads to an increase in real GDP (temporary) and the price level (permanent) in a number of economies in our sample, most notably in Hong Kong and the Philippines. The impact could result from intertemporal substitution present in a general equilibrium framework, which allows for positive domestic impacts of foreign monetary expansions. Our results emphasize the growing importance of China for its neighbouring economies and the significance of Chinese shocks for the design of monetary policy in Asian economies.JEL classifications: E52, F42.

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Demand for Money in Transition: Evidence from China’s Disinflation

Abstract: Money demand, Disinflation, Deflation, China, E40,

Cited by 16 publications

References 30 publications

The Impact of Chinese Monetary Policy Shocks on East Asia

The Impact of Chinese Monetary Policy Shocks on East Asia

Estimating a Function of Real Demand for Money in Pakistan: An Application of Bounds Testing Approach to Cointegration

The impact of Chinese monetary policy shocks on East and South‐East Asia¹

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Demand for Money in Transition: Evidence from China’s Disinflation

Abstract: Money demand, Disinflation, Deflation, China, E40,

Cited by 16 publications

References 30 publications

The Impact of Chinese Monetary Policy Shocks on East Asia

The Impact of Chinese Monetary Policy Shocks on East Asia

Estimating a Function of Real Demand for Money in Pakistan: An Application of Bounds Testing Approach to Cointegration

The impact of Chinese monetary policy shocks on East and South‐East Asia1

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The impact of Chinese monetary policy shocks on East and South‐East Asia¹