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The New Monetary History of China: A Comprehensive Guide

Wayne Carter

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Published in Empire Of Silver: A New Monetary History Of China

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Empire of Silver: A New Monetary History of China

4.3 out of 5

Language	:	English
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Print length	:	385 pages

The New Monetary History of China is an alternative interpretation of the country's monetary history, challenging the conventional view held by many economists. This article provides a comprehensive guide to the New Monetary History of China, exploring its origins, principles, and impact on the Chinese economy.

Origins of the New Monetary History of China

The New Monetary History of China emerged in the early 2000s as a response to the shortcomings of the conventional monetary history of China. The conventional view argued that China's central bank, the People's Bank of China (PBOC),had little control over the money supply and that monetary policy was largely ineffective in influencing economic growth and inflation.

The New Monetary History of China, on the other hand, argues that the PBOC has significant control over the money supply and that monetary policy is a powerful tool for managing economic growth and inflation. This view is based on the assumption that the demand for money is relatively stable in China and that the PBOC can therefore influence the money supply by controlling the supply of base money.

Principles of the New Monetary History of China

The New Monetary History of China is based on the following key principles:

The demand for money is stable. The New Monetary History of China assumes that the demand for money in China is relatively stable. This assumption is based on the observation that the ratio of money to GDP has been relatively constant in China over the long term.
The PBOC controls the supply of base money. The New Monetary History of China argues that the PBOC has significant control over the supply of base money, which is the sum of currency in circulation and reserves held by commercial banks at the central bank.
Monetary policy is effective in influencing economic growth and inflation. The New Monetary History of China believes that monetary policy is a powerful tool for managing economic growth and inflation. This is because the PBOC can use monetary policy to influence the money supply, which in turn affects interest rates and economic activity.

Impact of the New Monetary History of China

The New Monetary History of China has had a significant impact on the understanding of China's monetary policy and its role in economic development. The following are some of the main impacts:

Increased recognition of the PBOC's role in monetary policy. The New Monetary History of China has helped to increase recognition of the PBOC's role in monetary policy. This has led to a greater understanding of how monetary policy is conducted in China and its impact on the economy.
Increased use of monetary policy tools. The New Monetary History of China has led to an increased use of monetary policy tools by the PBOC. This has included the use of interest rate changes, reserve requirement changes, and open market operations.
Improved monetary policy outcomes. The New Monetary History of China has helped to improve monetary policy outcomes in China. This has included a reduction in inflation and greater stability in economic growth.

The New Monetary History of China is a significant contribution to the understanding of China's monetary policy and its role in economic development. It has helped to increase the recognition of the PBOC's role in monetary policy and has led to an increased use of monetary policy tools. This has resulted in improved monetary policy outcomes in China.

Empire of Silver: A New Monetary History of China

4.3 out of 5