China's monetary sterilization and it's economical relationship with the European Union

Gábor, Tamás: China's monetary sterilization and it's economical relationship with the European Union. Crisis Aftermath: economic policy changes in the EU and its Member States : International Conference University of Szeged 8-9 March 2012 : conference Proceedings. pp. 356-381. (2012)

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Abstract

The author examines China’s monetary policy in the light of the sterilization process of the excess liquidity caused by the permanent foreign exchange rate intervention. The tools of the neutralization of the monetary oversupply, its effectiveness and its costs are also investigated. With the help of Two-stage least squares (2SLS) regression method it is demonstrated that the sterilization process of the yuan has been almost a total success on the level of the monetary base, and has been partially effective on the level of the M2 supply in the past 15 years. With a cost-benefit analysis it is highlighted that the practice of the monetary sterilization – which is thought to be loss-making in the literature – has been a profitable operation of the central bank up to date. After the demonstration of the monetary sterilization, the economic relationship between China and the European Union is investigated. It is pointed out that China’s role as a global importer and a global investor has been significantly appreciated. Thanks to China’s active economic presence in the European market during the crisis, the recession of the European economies were probably much moderate.

Item Type: Article
Journal or Publication Title: Crisis Aftermath: economic policy changes in the EU and its Member States : International Conference University of Szeged 8-9 March 2012 : conference Proceedings
Date: 2012
Page Range: pp. 356-381
ISBN: 978-963-306-159-6
Uncontrolled Keywords: Gazdasági kapcsolatok - Európai Unió - Kína
Additional Information: Bibliogr.: p. 380-381. ; összefoglalás angol nyelven
Date Deposited: 2019. May. 20. 11:08
Last Modified: 2019. May. 20. 11:08
URI: http://acta.bibl.u-szeged.hu/id/eprint/57504

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