China's financial prices are informative enough for the PBC to introduce a monetary policy framework centered around interest rates. While bond yields are not fully efficient?reflecting regulation, liquidity, and segmentation?we find they contain considerable information about the state of the...

Interest rates in China are composed of a mix of both market-determined interest rates (interbank rates and bond yields), and regulated interest rates (retail lending and deposit rates), reflecting China’s gradual process of interest rate liberalization. This paper investigates the main...

Revenue volatility poses challenges for fiscal policy makers. It can create risks to service provision, require borrowing, or entail sudden tax changes. This paper investigates the use of value-at-risk techniques to measure the fiscal risks caused by volatility as well as the sensitivity of...

Sharp increase in house prices combined with the extraordinary lending growth in Mainland China during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by...

This paper presents a new graphical analysis of how a profit-maximizing firm will respond when required to control pollution. The focus is on graphical presentations which attempt to integrate the two pollution reduction responses open to the firm: output reduction and use of abatement...

Global imbalances have been a central theme of the international economic policy debate for much of the last decade, prompted by large and sustained current account deficits in the U.S. and counterpart surpluses in China, Germany, and among many of the oil producers. This paper focuses on the...

Sharp increase in house prices combined with the extraordinary lending growth in Mainland China during 2009 has led to concerns of an emerging real estate bubble. We find that, for China as a whole, the current levels of house prices do not seem significantly higher than would be justified by...

In this paper we study European banks' demand for short-term funds (liquidity) during the summer 2007 subprime market crisis. We use bidding data from the European Central Bank's auctions for one-week loans, their main channel of monetary policy implementation. Through a model of bidding, we...

This paper contributes to the existing literature on central bank repoauctions. It is based on a structural econometric approach, whereby the primitives of bidding behavior (individual bid schedules and bid-shading components) are directly estimated. With the estimated parameters we calibrate a...