What question did this study set out to answer?

The aim is to measure the natural rate of real interest in China and evaluate its reliability as an indicator of monetary policy.

Measuring the Natural Rate of Real Interest for the Chinese Economy

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This analysis assesses natural rate indicators in the Chinese economy, highlighting implications for monetary policy implementation.

The aim is to measure the natural rate of real interest in China and evaluate its reliability as an indicator of monetary policy.
Used quarterly data from 1990q1 to 2018q4
Employed simple univariate methods including historical averages and filtering techniques
Developed a VAR/VECM model based on the Taylor rule
Conducted robustness checks using a New Keynesian system
Evaluated and compared all estimates for reliability.
Natural real rate varies over time with a countercyclical pattern
Estimate based on the Taylor rule is most efficient for indicating monetary policy stance
Findings provide new insights into the operation of monetary policy in China.

Lei Sun (2026) studied this question.

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