A Bridge on Economic Issues between China and the World
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Do Interest Rates Play a Major Role in Monetary Policy Transmission in China?
Gunes Kamber, Madhusudan Mohanty, Aug 17, 2018We explore the role of interest rates in monetary policy transmission in China in the context of its multiple instrument setting. In doing so, we construct a new series of monetary policy surprises using information from high frequency Chinese financial market data around major monetary policy announcements. We find that a contractionary monetary policy surprise increases interest rates and significantly reduces inflation and economic activity. Our findings provide further support to recent studies suggesting that monetary policy transmission in China has become increasingly similar to that in advanced economies.
Are the Most Aggressive Investors in China Actually Informed?
Christian T. Lundblad, Zhishu Yang, Qi Zhang, Aug 30, 2017Using a unique Chinese data set capturing the trading behavior of particularly aggressive investors, we provide new evidence that is consistent with the presence of informational advantages. Critically, an advantage of our data is that we can also directly identify several plausible channels through which such an informational advantage could arise. Specifically, return predictability around key value-relevant events is most pronounced in the presence of aggressive traders who share the same geographic location as the firms in which they trade.
Do CEOs Know Best? Evidence from China
Nicholas Bloom, Hong Cheng, Mark Duggan, Hongbin Li, Franklin Qian, Jan 30, 2019Using data from the China Employer-Employee Survey (CEES), a recent survey of Chinese manufacturing firms, we analyze the extent to which employees of differing levels are able to assess their firms’ management practices. Our study finds that of CEOs, managers, and workers, CEOs tend to have the most accurate appraisals of their firms. Additionally, we find that firms with higher levels of disagreement...
In Rural China, Gift-Giving Is an Increasingly Costly Competition
Erwin Bulte, Ruixin Wang, Xiaobo Zhang, May 01, 2019Gift expenditures grow swiftly in rural China and may adversely affect people's welfare. While gift-giving helps to maintain social status and connections, gift competition may create a predicament: people must spend more and more to "keep up with the Joneses." As a result, the escalating gift expenses crowd out spending on other important consumption and become increasingly burdensome to people in rural areas, particularly to the poor.
Going Green in China: Firms’ Responses to Stricter Environmental Regulations
Haichao Fan, Joshua Graff Zivin, Zonglai Kou, Xueyue Liu, Huanhuan Wang, Apr 29, 2020Evidence from China shows that firms respond to stricter enforcement of the emission reduction target by reducing their pollution. This effect is stronger for firms in industries with higher pollution intensity. Stricter environmental regulations also lead to sharp declines in firms’ profits, capital, and labor. A sequence of tests of the underlying mechanisms reveals...
