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Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China

The outbreak of COVID-19 has brought a serious impact on the economies of various countries, monetary policy needs to play a role in stimulating economic recovery when the economy encounters a serious negative impact. Since the recurrent outbreak of COVID-19 has caused great obstacles to the normal...

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Detalles Bibliográficos
Autores principales: Zhou, Baicheng, Wang, Shu, Gao, Henan, Wang, Han
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Frontiers Media S.A. 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9163316/
https://www.ncbi.nlm.nih.gov/pubmed/35669741
http://dx.doi.org/10.3389/fpubh.2022.865699
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author Zhou, Baicheng
Wang, Shu
Gao, Henan
Wang, Han
author_facet Zhou, Baicheng
Wang, Shu
Gao, Henan
Wang, Han
author_sort Zhou, Baicheng
collection PubMed
description The outbreak of COVID-19 has brought a serious impact on the economies of various countries, monetary policy needs to play a role in stimulating economic recovery when the economy encounters a serious negative impact. Since the recurrent outbreak of COVID-19 has caused great obstacles to the normal economic exchanges between countries, it has become particularly important to build the domestic market and optimize the industrial allocation at this time. This paper focuses on studying the dynamic impact of China's monetary policy implementation on the industrial structure during the pandemic. Based on the data of the eight major economic zones in Mainland China and the dataset containing many of China's macroeconomic variables, a SV-TVP-FAVAR model is established. The manuscript compares the time-varying effects of monetary policy tools on the industries at different stages before and after the epidemic. The study supported some interesting conclusions. (1) Either the quantitative or price-based monetary policy shocks have significant time-varying impacts on the industries in different economic zones. The impacts of monetary policy on the primary, secondary, and tertiary industries in each economic zone are uneven. (2) The developed Northern, Eastern, and Southern coastal economic zones in Mainland China are more sensitive to the changes in monetary policy. (3) COVID-19 has brought a tremendous negative shock on the economy, which has destroyed the original steady-state of the economic system and added more uncertainty to the regulatory effect of monetary policy. Compared with other periods in China's economic history that severely negatively impacted (the Southeast Asian financial crisis and the global economic crisis), industries in most economic zones under the COVID-19 epidemic have been affected by monetary policy for a longer lag time. Therefore, for the implementation of monetary policy, at the moment of COVID-19 epidemic, we should pay more attention to the dual-pillar role of macro-prudential regulation, further improve the process of China's interest rate reform, enrich the monetary toolbox, and implement differentiated monetary policies in line with the economic zone's position, to optimize the regional industrial structure, and promote long-term economic growth.
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spelling pubmed-91633162022-06-05 Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China Zhou, Baicheng Wang, Shu Gao, Henan Wang, Han Front Public Health Public Health The outbreak of COVID-19 has brought a serious impact on the economies of various countries, monetary policy needs to play a role in stimulating economic recovery when the economy encounters a serious negative impact. Since the recurrent outbreak of COVID-19 has caused great obstacles to the normal economic exchanges between countries, it has become particularly important to build the domestic market and optimize the industrial allocation at this time. This paper focuses on studying the dynamic impact of China's monetary policy implementation on the industrial structure during the pandemic. Based on the data of the eight major economic zones in Mainland China and the dataset containing many of China's macroeconomic variables, a SV-TVP-FAVAR model is established. The manuscript compares the time-varying effects of monetary policy tools on the industries at different stages before and after the epidemic. The study supported some interesting conclusions. (1) Either the quantitative or price-based monetary policy shocks have significant time-varying impacts on the industries in different economic zones. The impacts of monetary policy on the primary, secondary, and tertiary industries in each economic zone are uneven. (2) The developed Northern, Eastern, and Southern coastal economic zones in Mainland China are more sensitive to the changes in monetary policy. (3) COVID-19 has brought a tremendous negative shock on the economy, which has destroyed the original steady-state of the economic system and added more uncertainty to the regulatory effect of monetary policy. Compared with other periods in China's economic history that severely negatively impacted (the Southeast Asian financial crisis and the global economic crisis), industries in most economic zones under the COVID-19 epidemic have been affected by monetary policy for a longer lag time. Therefore, for the implementation of monetary policy, at the moment of COVID-19 epidemic, we should pay more attention to the dual-pillar role of macro-prudential regulation, further improve the process of China's interest rate reform, enrich the monetary toolbox, and implement differentiated monetary policies in line with the economic zone's position, to optimize the regional industrial structure, and promote long-term economic growth. Frontiers Media S.A. 2022-05-20 /pmc/articles/PMC9163316/ /pubmed/35669741 http://dx.doi.org/10.3389/fpubh.2022.865699 Text en Copyright © 2022 Zhou, Wang, Gao and Wang. https://creativecommons.org/licenses/by/4.0/This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
spellingShingle Public Health
Zhou, Baicheng
Wang, Shu
Gao, Henan
Wang, Han
Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China
title Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China
title_full Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China
title_fullStr Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China
title_full_unstemmed Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China
title_short Research on Monetary Policy Implementation and Industrial Structure Transformation Under COVID-19—Evidence From Eight Economic Zones in Mainland China
title_sort research on monetary policy implementation and industrial structure transformation under covid-19—evidence from eight economic zones in mainland china
topic Public Health
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9163316/
https://www.ncbi.nlm.nih.gov/pubmed/35669741
http://dx.doi.org/10.3389/fpubh.2022.865699
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