TY  - CHAP
AB  - Abstract The RMB Internationalization has a great impact on China’s domestic economy. This chapter applies the Gap Estimation approach to estimate the RMB overseas circulation amount from 1997 to 2015, as the indicator of RMB internationalization. Using the recently developed Directed Acyclic Graph (DAG) method for the model identification and contemporaneous causality analysis. The structural vector auto regression (SVAR) model is constructed between the economic indicators (the interest rate, the CPI, and the exchange rate) and the RMB overseas circulation. The dynamic relationship and degree of mutual influence are further studied between the economic indicators and overseas circulation. The results show that there exist contemporaneous causalities of “from RMB overseas circulation to inflation rate,” “from exchange rate to overseas circulation,” and “from exchange rate to the inflation rate.” The influence of interest rate adjustment on macro economy presents the time lag effect. The internationalization of the RMB encourages the currency appreciation. The China’s Central Bank passively looses monetary policy to meet the needs of internationalization and reduce the shock of the international hot money, thereby further deepening the domestic inflation.
VL  - 25
SN  - 978-1-78756-453-4, 978-1-78756-454-1/1571-0386
DO  - 10.1108/S1571-038620180000025003
UR  - https://doi.org/10.1108/S1571-038620180000025003
AU  - Wang Cong
AU  - Wang Xue
PY  - 2018
Y1  - 2018/01/01
TI  - The Macroeconomic Effects of RMB Internationalization: The Perspective of Overseas Circulation
T2  - Banking and Finance Issues in Emerging Markets
T3  - International Symposia in Economic Theory and Econometrics
PB  - Emerald Publishing Limited
SP  - 31
EP  - 50
Y2  - 2024/04/23
ER  -