Are Mid-Term and Long-Term Interest Rates Available for a Forward-Looking Taylor Rule? -An Empirical Analysis Based on the Chinese Data

Seldom researchers have paid more attention to the impacts of real effective exchange rate regimes on Chinese monetary policy. By building a forward-looking Taylor rule, we have analyzed the relationships between the eight kinds of interest rates and the deviations of the inflation rate from three kinds of targets, deviations of real effective exchange rate from two kinds of targets, and deviations of real GDP growth rate from a rigid official planned target. The empirical results are: the inflation targeting regime is dominated by Chinese monetary policy; the exchange rate targeting regime has an important impact on Chinese monetary policy