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On International Short-Term Capital Movements and China’s Monetary Policy Independence: An Empirical Analysis
- China: An International Journal
- NUS Press Pte Ltd
- Volume 11, Number 1, April 2013
- pp. 75-93
- 10.1353/chn.2013.0009
- Article
- Additional Information
Against the backdrop of the increasing impact of international short-term capital movements in the global economy, China’s monetary policy independence has also been affected. This article outlines several important effects of international short-term capital movements on China’s monetary policy independence by analysing features of channels and mechanisms of short-term international capital movement. The relationship between international short-term capital movements and China’s monetary policy independence is studied econometrically using a value-at-risk model. The findings indicate that such capital influxes, especially those from abnormal channels in huge volumes, do adversely affect China’s monetary policy independence.