A Bridge on Economic Issues between China and the World
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Interest rates and exchange rates when the money supply goes up
Saleem Bahaj, Ricardo Reis, May 21, 2025The power of monetary policy to affect interest rates and exchange rates depends on the downward slope of the demand function. This column uses the Chinese experiment with parallel currencies to study the impact of sudden increases in money supply. The authors find causal evidence that increases in money supply lead to currency depreciations, and use this to quantify the interest elasticity of reserve demand. The results can be used to understand how the People’s Bank of China maintained the peg between the mainland and parallel currencies.
Growing Apart: Declining Within- and Across-Village Risk Sharing in Rural China
Orazio Attanasio, Costas Meghir, Corina Mommaerts, and Yu Zheng , May 25, 2022China has embarked on an ambitious campaign to close income gaps, address regional inequality and unfair social welfare provision, and make solid progress toward common prosperity by 2035. This marks a shift in focus from overall growth to promoting equitable and balanced growth.
Financing Micro-entrepreneurship in Online Crowdfunding Markets: Local Preference versus Information Frictions
Jian Ni, Yi Xin, Sep 30, 2020Crowdfunding has become an important financing alternative for micro-entrepreneurship. We study to what extent bias toward local entrepreneurs is prevalent in crowdfunding markets, determine the main driving forces for such bias, and examine how crowdfunding platforms and policymakers can leverage these forces to stimulate micro-entrepreneurship. Even though online crowdfunding platforms are designed to overcome geographic barriers, we find evidence of strong local bias induced by both informational frictions and local preference, with the former being more important.
Homemade Foreign Trading
Zhiguo He, Yuehan Wang, Xiaoquan Zhu, Jul 26, 2023Our recent study provides evidence that Chinese mainland insiders tend to evade see-through surveillance by round-tripping via the Stock Connect program.
Labor Market Discrimination against Family Responsibilities: A Correspondence Study with Policy Change in China
Haoran He, Sherry Xin Li, Yuling Han, Jan 24, 2024China shifted its controversial one-child policy (1979–2015) to a two-child policy in 2016. We take advantage of the unexpected timing of this policy change and the heterogeneities in the pre-change environment to investigate labor market discrimination against expected family responsibilities.
