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Understanding the Interaction of Chinese Fiscal and Monetary Policy
2021
Journal of Risk and Financial Management
Interaction of fiscal and monetary policy is crucial for macroeconomic stability, especially for an economy with downward pressure as well as a tightened space for macro policy, like China. In this paper, we use a time-varying-parameter (TVP-VAR) model to study Chinese fiscal–monetary interaction and divide it into three periods. We claim that China went through a monetary dominant regime from 1996Q to 2017Q4 since the response of CPI to a fiscal expansion was negative in the short run and
doi:10.3390/jrfm14090416
fatcat:ybuuqp6ya5c3bjpgzaq3xpva3q