This paper discusses the macroeconomic effects of China's informal banking regulatory tool “window guidance,” introduced in 1998. Using an open-economy DSGE model that includes the commercial banking sector, we study the stabilizing effects of this non-standard quantitative monetary policy...

This paper discusses the macroeconomic effects of China's informal banking regulatory tool “win-dow guidance,” introduced in 1998. Using an open-economy DSGE model that includes the com-mercial banking sector, we study the stabilizing effects of this non-standard quantitative monetary policy...