主题：The Nexus of Monetary Policy and Shadow Banking in China（中国货币政策和影子银行的内在关联）
We estimate the quantity-based monetary policy system in China. We argue that China's rising shadow banking was inextricably linked to banks' balance-sheet risk and hampered the effectiveness of monetary policy on the banking system during the 2009-2015 period of monetary policy contractions. By constructing two micro datasets at the individual bank level, we substantiate this argument with three empirical findings: (1) in response to monetary policy tightening, nonstate banks actively engaged in intermediating shadow banking products; (2) these banks, in sharp contrast to state banks, brought shadow banking products onto the balance sheet via risky investments; (3) bank loans and risky investment assets in the banking system respond in opposite directions to monetary policy tightening, which makes monetary policy less effective. We build a theoretical framework to derive the above testable hypotheses and explore implications of the interaction between monetary and regulatory policies.
Kaiji Chen is currently an associate professor with tenure at Emory University and research fellow at Federal Reserve Bank of Atlanta. His main research areas are Macroeconomics and Financial Economics. He has published in top economic journals such as American Economic Review, NBER Macroeconomic Annual, American Economic Journal: Macroeconomics, and Journal of Monetary Economics. Recently, his research has been focused on China’s macroeconomy, and in particular, its interaction with financial sector and monetary policy. As the Principle Investigator, he has been awarded the U.S. NSF (National Science Foundation) grant for his project on China’s macroeconomy and financial sector.