institutional and structural changes that China has undergone. We find that increases in bank reserve requirements reduce economic … activity and inflation, consistent with previous studies. In contrast to much of the literature, however, we find that central-bank …

We analyze a new class of equilibria that emerges when a central bank conducts monetary policy by setting an interest … equilibria involve a run on the central bank's interest target, whereby money grows fast, private agents borrow as much as … possible against the central bank, and the shadow interest rate is different from the policy target. We argue that these …