Analysis of nonlinear structure of financial policy goals based on trilemma

作者：Zhang, Qun; Zhang, Weiguo; Li, Jiaming

来源：Systems Engineering-Theory & Practice, 2016, 36(7): 1633-1642.

DOI：10.12011/1000-6788(2016)07-1633-10

• Different proportions
• Differential evolution algorithms
• Foreign exchange reserve
• Monetary policies
• Nonlinear structure
• Structural stabilities
• System dynamics approach
• Trilemma

This paper proposes a bondage-based structural model that is derived from the trilemma constraint among the monetary, foreign exchange and securities markets. It introduces a foreign exchange intervention index to explore a new market landscape and regulatory strategies. Based on the differential evolution algorithm and its application to the data from January 1998 to April 2014, it presents the estimated nonlinear systems among the three policy goals of monetary independence, foreign exchange intervention and capital account openness. The analysis results show the existence of equilibrium and the local structural stability of systems by the system dynamics approach. Capital account openness and monetary independence are in proximity to moderate levels after a short-term evolution (about 1 year). It could lock-in into different proportions in the long-term evolution (about 5 years) for its sensitive dependence on initial conditions. In addition, China has the policy preference in the predominance of exchange rate stability while the capital openness could be the leading indicator to affect their proportions.

• 出版日期2016-7-25
• 单位华南理工大学