【Abstract】

In this paper, a duration dependence test for speculative bubbles in the Chinese stock market is developed. It is found that bubbles in the aggregate stock price existed before the split share reform. After the reform, we observe the phenomenon of bubble migration across industries. In particular, bubbles migrate from the telecommunications industry to the health care industry. Moreover, we find that monetary policy used to have a significant impact on the bubble size before the reform but the impact diminished after the reform.

【Keywords】

Reserve Currency, Exchange Rate Volatility, Exorbitant Privilege, Fiscal Discipline, Hard Anchor, Balance of Payments, Real SDR

【Authors】

Di Dongsheng, Associate Dean of the School of International Studies, Renmin University of China, Senior Research Fellow of IMI

Warren Coats, Former chief of the SDR Division of the Finance Department, IMF

Zhao Yuxuan, Agriculture Global Practice, International Bank for Reconstruction and Development (IBRD)