Abstract Preceding constraint of cash exists obviously in the resident consumption of China. Introducing monetary shock into the real business cycle model through the preceding constraint of cash conforms to the operating features of Chinese economy. The author analyses the influence of exogenous monetary shock on the fluctuation of Chinese economy based on the RBC theory. The study shows that money issuance shocks mainly affect the fluctuations of consumption, investment, and inflation rate and the fluctuation amplitudes of other economic variables remain basically unchanged
2011, Vol. 28 
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