How responsive is China's stock market to the monetary polices

Xin Kai Chen, Dejun Xie*

*Corresponding author for this work

Research output: Chapter in Book or Report/Conference proceedingConference Proceedingpeer-review

1 Citation (Scopus)

Abstract

The development of China deeply associate with the supports for dfferent industries from China Government, since the beginning to the middle of 2015, Central Bank of China has implement three reductions of deposit and loan interest rate and three reductions of deposit reserve rate of financial institution. These monetary policies which increase the liquidity of cash flows in the market certainly will bring positive stimulation to Chinese stock market. This study bases on these monetary policies mentioned above, utilizes Event Study Methodology and studies the response efficiency of Chinese stock market to those monetary policies issued by Central Bank. From the outcomes of the models, we find that there are varying degrees of feedback of Shanghai and Shenzhen Stock Market when the policies were enacted, and the impacts of every stimulation starts to fade out in the third trading days after the enaclion dates of each monetary policy.

Original languageEnglish
Title of host publicationIMECS 2016 - International Multiconference of Engineers and Computer Scientists 2016
EditorsDavid Dagan Feng, Alexander M. Korsunsky, S. I. Ao, Craig Douglas, Oscar Castillo
PublisherNewswood Limited
Pages788-793
Number of pages6
ISBN (Electronic)9789881404763
Publication statusPublished - 2016
EventInternational Multiconference of Engineers and Computer Scientists 2016, IMECS 2016 - Tsimshatsui, Kowloon, Hong Kong
Duration: 16 Mar 201618 Mar 2016

Publication series

NameLecture Notes in Engineering and Computer Science
Volume2
ISSN (Print)2078-0958

Conference

ConferenceInternational Multiconference of Engineers and Computer Scientists 2016, IMECS 2016
Country/TerritoryHong Kong
CityTsimshatsui, Kowloon
Period16/03/1618/03/16

Keywords

  • Event study
  • Monetary policy
  • Response efficiency
  • Stock market

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