Abstract:

This paper studies how Dollar Standard influences the stability of macro-economy of China. Our conclusions are (1) the Dollar Standard influences the stability of macroeconomy of China through risk sharing mechanism of international commodity market and international financial market, (2) the size of an economy and the type of shocks affect the stability of China’s macro-economy. The Dollar Standard will increase the stability of macro-economy of China when the Chinese economic scale is small and internal shocks are weak. While the Dollar Standard will lead to the severe instability of China’s macro-economy, especially to the price and exchange rate, when the Chinese economy scale increases and exogenous shocks play a lion’s share.

keywords:Dollar Standard, Stability of Macro-economy, New Keynesianism

(原文刊于International Journal of Applied Mathematics and Statistics 2013, Vol.47, Issue.17)