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In this paper, we reexamine the literature on money demand in China published both in English and Chinese language. Over the past 30 years, there has been a regular stream of papers assessing the Chinese money demand function. The literature mostly focuses on income elasticity, stability, and, especially important for China, the adequate choice and quality of data. In particular, regarding the stability of money demand, we find a substantial publication bias towards rejecting stability. When controlling for publication bias and focusing on longer time periods, our paper strongly suggests a stable long-run money demand in China.

Money Demand in China: A Meta Study