汇率制度资本流动限制与中国货币政策独立性.DOCVIP

- PAGE 5 - RMB Exchange rate regime and the autonomy of China’s monetary policy Li Heng School of Economics and Management, Beijing University 1. Introduction China’s exchange rate regime was reformed in July, 2005, with RMB no longer pegged to US dollar and the band within which RMB fluctuates widened. Is the autonomy of China’s monetary policy enhanced by the more flexible exchange rate? According to the open-economy trilemma, as the capital markets being opened to foreign investors, the autonomy of domestic monetary policy will be abated under a credible fixed exchange rate regime. This paper will test this tenet using data from China. Numerous researches have been conducted on the empirical analysis of the impact of exchange rate regime on the autonomy of monetary policy (Frankel et al., 2002; Obstfeld et al., 2004; Shambaugh, 2004; Cheung et al., 2007). This paper is in line with the work of Obstfeld et al. (2004) and Shambaugh (2004), which analyzes the effect of the exchange rate regime on the autonomy of China’s monetary policy between December 2001 and December 2006. Researchers have conducted enormous empirical analysis on the impact of various exchange rate regimes and capital control status on monetary policy autonomy, with thorough covering in terms of periods and countries. The conclusions are not unanimous. Frankel et al. (2002) use the level data of scores of countries with pegged or non-pegged exchange rate regimes, and study the impact of exchange rate regime on monetary policy autonomy over the period between 1970 and 1999. They find that monetary autonomy do not necessarily abate under pegged exchange rate regime. However, Shambaugh (2004) points out that the level data analysis might lead to spurious regress thereby generating incorrect results. Obstfeld et al. (2004) avoid this problem by using difference data. By examining scores of countries in the interwar period, they conclude that more flexible exch