Evidences of the Asymmetric Effects from China's Monetary Policy in the Period after the Financial Crisis

Abstract

This paper investigates whether there are asymmetric effects of monetary policy in China economy. We use logistic smooth transition vector auto regression (LSTVAR) model to focus on the nonlinearity of the whole system varying over the transition variables. The results of estimation and generalized impulse response function imply that the effects of output and inflation vary with the sign of monetary shocks, the size of monetary shocks, and the phase of the business cycle.