Environmental Science
8 years ago

China's Fixed Exchange Rate Regime Hinders Monetary Policy Effectiveness.

Journal of Hubei University of Economics
A Theoretical Study and Realistic Analysis of Fixed Exchange Rate Regime and Monetary Policy Validity
HE Hui-gang

Paper Summary

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The article shows that China's fixed exchange rate regime limits the effectiveness of its monetary policy. To improve this, the exchange rate regime needs to be reformed. In the short term, a Target Zone should be established, and in the long term, a floating exchange rate regime is needed.