A Bridge on Economic Issues between China and the World
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Local Government Financial Constraint and Spending Multiplier in China
Yang Su, Dec 28, 2022Local fiscal policies have been very effective in China since 2000.
Interest rates and exchange rates when the money supply goes up
Saleem Bahaj, Ricardo Reis, May 21, 2025The power of monetary policy to affect interest rates and exchange rates depends on the downward slope of the demand function. This column uses the Chinese experiment with parallel currencies to study the impact of sudden increases in money supply. The authors find causal evidence that increases in money supply lead to currency depreciations, and use this to quantify the interest elasticity of reserve demand. The results can be used to understand how the People’s Bank of China maintained the peg between the mainland and parallel currencies.
Increasing government transparency reduced pollution violations and improved air quality in China
Mengdi Liu, Mark Buntaine, Sarah Anderson, Bing Zhang, Sep 03, 2025Government transparency helps bridge gaps between environmental laws and actual practices, improving health and environmental quality broadly.
Empowering through Courts: Judicial Centralization and Municipal Financing in China
Jiayin Hu, Wenwei Peng, Yang Su, Aug 28, 2024This article discusses that the judicial centralization reform gradually implemented in China since 2014 has enhanced the independence of the judicial system, limited the intervention of local governments, and reduced court biases in favor of local governments.
Competitive Effects of China’s Listing Suspensions
Frank Packer, Mark M. Spiegel, Oct 28, 2020China’s suspensions of initial public offerings (IPOs) provide a unique opportunity to evaluate the competitive effects of IPO activity on listed firms, as existing studies are challenged by the influence of market conditions on IPO timing. We evaluate the stock returns of listed firms on the Shanghai and Shenzhen exchanges over the three most recent suspensions. We confirm adverse effects on listed firms from IPOs, both from direct competition and from the creation of close asset substitutes. We also find that weaker firms are more exposed to the adverse effects of IPO listings.
