Economics, Econometrics and Finance
8 years ago

China's Currency Substitution Uncovered: Impact on Money Demand and Stability.

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Modern Economy
Demand for Money in China with Currency Substitution: Evidence from the Recent Data
Yongqing Wang

Paper Summary

China studied money demand after changing its exchange rate system. They found that M2 is the best measure of money because it is stable and related to its factors. They also discovered strong evidence of currency substitution for M2.

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