Non-Symmetry of China’s and US Monetary Policy Spillovers:Theoretical Modelling and Empirical Analysis

This study develops a structural vector autoregression(SVAR)framework to empirically examine the reciprocal transmission channels of monetary policies between China and the United States.The primary objective is to discern potential disparities in the spillover effects of monetary policies and ascertain any contrasting mechanisms underlying these effects across the two countries.Based on our research,it appears that there exists a certain level of non-symmetry in the spillover effects of monetary policy between the two countries.Moreover,this paper provides adequate analysis of disparities in the trade framework,capital control,and financial market operations of both countries in constructing a dynamic stochastic general equilibrium(DSGE)model that incorporates financial frictions for the examination of the theoretical rationale.The empirical findings indicate that China’s monetary policy creates a spillover effect primarily through trade.In China,following an increase in its interest rates,the domestic economic activity will experience a contraction,leading to a decline in both investment and output.Consequently,this will result in a decrease in China’s imports of investment goods from the United States,impacting the output of the US economy.In contrast,the US monetary policy exerts a spillover effect primarily through finance.An increase in interest rates by the United States is associated with a notable outflow of capital from China.This leads to a rise in the financing costs for Chinese firms,consequently diminishing their overall net worth.In light of the financial accelerator effect,corporate external financing risk premium will continue to increase,exacerbating the downward trajectory of China’s output.

Spatial emission reduction effects of China’s carbon emissions trading:quasi-natural experiments and policy spillovers

Insufficient assessment of emission reduction effects still exists in the carbon emission rights trading system,a major environmental regulation measure in China.Based on the data from the carbon trading pilot covering the years from 2007 to 2017,this study combined the synthetic control method with dynamic spatial Durbin model to comprehensively evaluate the spatial emission reduction effects of carbon trading policies.The results showed that:①The carbon trading policies promoted carbon emission reductions in the pilot regions,among which Tianjin and Hubei responded significantly,and also helped to suppress carbon emissions in the neighboring areas.②Long-term emission reduction effect from carbon emissions trading became gradually significant,while the indirect emission reduction effect was relatively weaker.③In term of reducing carbon emissions,the economic development channel played a key role,but it had a threat to the promotion of carbon emissions in the surrounding areas.Energy consumption was the main obstacle to the growth of carbon emissions.④In the long run,technological progress tended to become the key to the effective implementation of potential emission reduction effects of carbon trading policies.Based on the above findings,we suggest that the construction of a national carbon trading market should be promoted,the balanced development and orderly advancement of regional carbon trading markets should be paid attention to,the coordinated development of green economy as well as knowledge and technology exchange and cooperation among regions should be strengthened to form a low carbon development model among regions.

Policy spillover and regional linkage characteristics of the real estate market in China's urban agglomerations

The main purpose of this study is to determine the spillover effect of real estate regulatory policies released by core cities on the surrounding cities in major urban agglomerations based on regional linkage characteristics of China's real estate market.In this study,real estate transaction data of 157 cities were selected from 11 major urban agglomerations.Agglomeration's housing transaction volatility and spillover effect caused by the core city's regulatory policies were simulated by integrating spatial and temporal analysis model,event analysis,and symbolic time series analysis.The findings showed that(1)the regional linkage of the real estate market in the Harbin-Changchun and Middle-South Liaoning,Middle Reaches of the Yangtze River,Yangtze River Delta,Pearl River Delta,and West Side of the Straits agglomerations were remarkably tight and the core cities'policy spillover effect was significant,of which the house purchase limitation and credit limitation policies had the widest influence;(2)the regional linkage of the real estate market in the Beijing-Tianjin-Hebei agglomeration,Shandong Peninsula,Guanzhong Plain,and Chengdu-Chongqing agglomerations was relatively weaker,but the core cities'policies of mar-ket regulation and taxation had certain spillover effect;(3)there were significant differ-ences in the spillover effects of different types of policies in different urban agglomerations;(4)generally,the core cities'policy spillover often reduced the changing characteristics of the real estate market and made it more ordered with more certainty in the whole agglomeration,with the exception of the Beijing-Tianjin-Hebei,West Side of the Straits,and Chengdu-Chongqing agglomerations.

Do Free Trade Zones Improve Air Quality?

As a new window of opening up to the outside world in the new era,the establishment of Free Trade Zones(FTZs)in China is an important national strategy for promoting high-quality economic development wherein the prevention and control of pollution is an important hurdle to be surmounted throughout the process.Based on data taken from model cities for environmental protection in China from 2008 to 2017,given the effect of policy spillover,this study considers the establishment of FTZs to be a"quasinatural experiment."It uses the general analysis paradigm of spatial difference-indifference(DID)to systematically examine the impact of FTZs on air pollution as well as to conduct an in-depth analysis of their spatial heterogeneity and mechanism of action.The study shows that the establishmentofFTZs significantlyreduces the concentration of air pollutants in cities.If the spatial DID method is adopted to measure the policy spillover effect of the establishment of free trade zones,urban air pollutants declines by 12%to 17%,while the estimated result using the traditional DID method is only 7%.The establishment of FTZs significantly alleviates air pollution in neighboring non-pilot cities as well.Based on the range of the spillover effect from the center of the FTZ,it is found that the average spatial spillover effect presents as an inverted"U"curve as the research radius increases,with an optimal policy spillover effect radius of about 200km,while the policy spillover effect between pilot cities remains poor.The establishment of an FTZ not only improves the local atmospheric environment by promoting industrial structure optimization and green technology innovation in pilot cities but also generates a spillover effect on neighboring non-pilot cities through the same mechanism,thus contributing to improving the atmospheric environment in those non-pilot cities.These findings remain valid following a series of robustness tests such as the spatial parallel trend test and the placebo test.This study offers an answer to the key question of whether free trade zone policy can truly promote high-quality economic development in the new era.It provides useful policy insights for further expanding opening up,winning the battle for the prevention and control of pollution,and promoting the high-quality development of China's economy.

Impact of the Construction of Ecological Civilization Demonstration Areas on Carbon Emission Intensity

The development path from attaching importance to environmental protection to the theory of ecological conservation,then to piloting ecological civilization demonstration areas,marks that China’s ecological conservation has gradually moved from theoretical construction to practical exploration,based on the new idea that“lucid waters and lush mountains are invaluable assets.”It is still an ordeal for China’s ecological conservation in the context of global warming how to reduce carbon emission intensity while maintaining sustained economic growth.Under the dual constraints of peaking carbon dioxide emissions before 2030 and achieving carbon neutrality before 2060(“dual carbon”goals),this paper employs the five national ecological civilization pilot demonstration areas(ECDAs)established in 2014 as quasi-natural experiments based on the panel data of 30 Chinese provincial regions from 2003 to 2019.Based on the analysis of the policy implementation background and the theoretical mechanism of its impact on carbon emission intensity,the synthetic control method and difference in differences method are adopted to test the impact of the construction of ECDAs on carbon emission intensity and examine the spatial spillover effect of the pilot policies.The study shows that the construction of ECDAs has significantly reduced carbon emission intensity as a whole,especially in Fujian,Guizhou,and Yunnan Provinces.Moreover,the conclusions successfully pass the robustness test.The mechanism analysis results demonstrate that the construction of ECDAs can lower carbon emission intensity through the positive incentives from boosting technological progress and developing green finance,and the reversal pressure mechanism of optimizing the energy structure and improving the market segmentation.The analysis results of the spatial spillover effect indicate that the construction of ECDAs plays a significant role in reducing carbon emission intensity in the region and its adjacent areas.Therefore,China should introduce ECDAs and the experience gained to more regions.Meanwhile,China should spare no effort to seek multi-dimensional paths to reduce carbon emissions in view of regional differences in green development,and strengthen cross-regional communications and cooperation to realize the goals of carbon emission reduction.