Why are the RMB Exchange Rate Policy and its Behaviors Reasonable?
Read
DownLoad |
| Title | Why are the RMB Exchange Rate Policy and its Behaviors Reasonable?
|
| Author | Wang Jinbin, Li Nan and Sun Tao |
| Organization | School of Economics, Renmin University of China |
| Email | wjinbin@ruc.edu.cn;lisouth2003@yahoo.com.cn;suntao@ruc.edu.cn |
| Key Words | Asymmetric Loss Preference; Output gap and Inflation gap; Discretion |
| Abstract | This paper adopts the asymmetric loss function to explore the preference nature of China’s Central Bank. With two methods to estimate the output gap, the econometric evidences do not support the hypotheses of the asymmetric loss preference on output gap or inflation gap. In other words, the symmetric loss preference of China’s Central Bank can’t be rejected. China’s Central Bank pays much attention to both the economic growth and inflation. The symmetric loss preference of China’s Central Bank may be related to the China’s economic growth model and complexity factors of inflation, which made the Central Bank to uses the discretion policies. |
| Serial Number | WP163 |
| Time | 2012-02-14 |
|