Financial Innovation and Central Banking in China: a Money View

This research project develops a “Money View” analysis of the recent evolution of China’s financial system.

We adopt the “Money View” term from Perry Mehrling, for whom it describes a tradition of practically oriented economists interested in the shifting forms of money and financial intermediation (such as Minsky, Wojnilower, and Kauffman). Money View analysis is always historically and institutionally-specific and has much to offer on contemporary issues of central banking, such as liquidity dynamics, the challenges posed by financial innovation, and the achievement of financial stability. We draw on the Money View to map the institutions, technologies, and forms of credit and governance systems involved in China’s financial system, and we explore the potential for financial instability and tensions in the country’s regulatory structure. This project is significant and novel in its extension of a Money View analysis to the world’s second largest economy, increasing the breadth of the application of the Money View and giving academics, students, and even policymakers a better understanding of the challenges involved in financial development, encouraging financial stability. The project contributes to both research and curriculum development and pedagogy through the development of research and teaching resources on financial innovation and central banking in China that could be widely adopted in economics and other social science courses, including business studies, politics and sociology. To get the latest updates on this project please visit the grantees’ blog Frontiers of Finance in China.