The Ins & Outs of Chinese Monetary Policy Transmission
Using a novel indicator for the People's Bank of China monetary policy stance, we estimate a policy rule that accounts for the dual nature of its price stability mandate—encompassing domestic inflation and the exchange rate—and for the evolution of its operational framework. The “Ins”: The domestic transmission follows textbook patterns, with exceptions due to the active management of the renminbi and the financial account. The "Outs": International spillovers are powerful and affect commodity markets, global production and trade. The pass-through to foreign (US) prices is substantial. Financial spillovers are second-order, and mostly derivative from trade spillovers.
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Copy CitationSilvia Miranda-Agrippino, Tsvetelina Nenova, and Hélène Rey, "The Ins & Outs of Chinese Monetary Policy Transmission," NBER Working Paper 34626 (2026), https://doi.org/10.3386/w34626.Download Citation
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