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The Choice of Monetary Policy Analysis Framework under the Open Economy

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DOI: 10.23977/FEIM2020.023


Xiao Cheng, Yumeng Zhang and Luyao Wang

Corresponding Author

Yumeng Zhang


Since entering the new century, China's economic fluctuations have shown obvious dynamic characteristics, mainly manifested by the relative slowdown of economic fluctuations. At present, the research on optimal monetary policy at home and abroad generally focuses on theoretical research, that is, directly assume that the monetary policy selected based on a certain rule or based on the target rule of zero inflation rate is optimal, lacking the main experience of monetary policy Perspective. The purpose of this article is to use the dynamic stochastic general equilibrium model that has been widely used in recent years to analyze and study the applicability of China's monetary policy rules in order to summarize previous research work. The data in this article begins in the first quarter of 2006 and ends in the third quarter of 2018. The data has been tested for stability and logarithm. The results show that the inflation rate and interest rate series can reject the null hypothesis at the 10% significance level, that is, the inflation rate and interest rate series do not have a unit root process, but are stationary series.


Open Economy, Monetary Policy, Base currency rules, Monetary Policy Rules

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