What measures Chinese monetary policy?

Rongrong Sun (Lead / Corresponding author)

Research output: Contribution to journalArticlepeer-review

20 Citations (Scopus)


This paper models the PBC's operating procedures in a two-stage vector autoregression framework. We decompose changes in policy variables into exogenous and endogenous components in order to find a “clean” monetary policy indicator whose changes are mainly policy induced. Our main findings are twofold. First, the PBC's operating procedures have evolved over time; since about 2006, they have developed to a relatively stable regime. Second, its operating procedures are neither pure interest rate targeting nor pure reserves targeting, but a mixture. A set of indicators all contain information about the policy stance. Finally, we construct a new composite indicator of the overall policy stance.
Original languageEnglish
Pages (from-to)263-286
Number of pages24
JournalJournal of International Money and Finance
Early online date9 Jul 2015
Publication statusPublished - Dec 2015


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