The Money Supply Process and Monetary Policy in China

This book applies both the mechanistic money multiplier model and the credit market theory to analyse the money supply process and monetary policy in China. It examines the effectiveness of the central bank's monetary policy instruments, and assesses the possible monetary policy strategy and operating procedure. The central theme is that the money supply has endogenous features due to the lack of an interest rate mechanism. Therefore, interest rate liberalisation is the key to improving the effectiveness of monetary policy in China.