Title: In Search of China's Equilibrium Interest Rate
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| Title | Title: In Search of China's Equilibrium Interest Rate
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| Author | Jin Zhongxia |
| Organization | The People’s Bank of China |
| Email | jzhongxia@pbc.gov.cn； |
| Key Words | China, Equillibrium Interest Rate. |
| Abstract | Is?China's interest rate generally lower than it should be? This paper has evaluated this?issue?from?various angles,?including using the classic Fisher Hyphothesis, Taylor Rule, Interest Rate?Parity and?a new framework based on DSGE model. It concludes that in an open economic environment,?China's equilibrium interest rate is determined?not only by its own natural interest rate and policy rate, but also the natural interest rate and policy rate of the major developed countries.?The influence of external factors?in turn?depends on?the extent of domestic currency mismach and the associated degree of exchange rate flexibility.?? |
| Serial Number | WP325 |
| Time | 2012-08-29 |
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