An Impossible Unity? The Effects of International Monetary Policy on Chinese Treasury Yields
Prof. Zehao Li
Assistant Professor,
The School of Management and Economics,
The Chinese University of Hong Kong (Shenzhen)
Date: 08 May 2025 (Thursday)
Time: 14:30-16:00
Venue: E22-G015
Abstract
This paper provides evidence that capital controls fail to insulate international spillovers of monetary policy shocks. A country with restricted capital flows, China’s Treasury yields are significantly affected by foreign monetary policy announcements and have changed constantly during the announcement windows, but barely respond to foreign non-monetary macroeconomic news announcements. Notably, Chinese yields closely track the announcement country’s counterparts during foreign monetary policy announcement windows but diverge on other days. We construct a model with imperfect information to explain the facts.
Speaker
Prof. Zehao Li is an Assistant Professor at the School of Management and Economics, The Chinese University of Hong Kong (Shenzhen). Prof. Li received his Ph.D. in economics from University of Wisconsin-Madison before joining CUHK Shenzhen in 2020. He is interested in macroeconomics, focusing on business cycle theory, financial frictions, and monetary policy. His recent publications include the Journal of Financial and Quantitative Analysis and European Economic Review.
All are welcome!
