Volume 29, Issue 5, 2020
DOI: 10.24205/03276716.2020.1041
The Impact of Shadow Banking on China’s Monetary Policy Objectives
Abstract
On the basis of summarizing the development of shadow banking in China, we analyze the influence of shadow banking on the ultimate goals of China’s monetary policy from both theoretical and empirical aspects. We find that the shadow banking in China has a positive impact on the change of prices, which reaches the maximum in the third stage and then declines. The contribution of shadow banking to GDP fluctuates, with a maximum close to 20%. China’s economic development has been inseparable from the support of shadow banking.
Keywords
shadow banking, monetary policy, price level, economic development