Graduation Year

2018

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Second Department

Politics and International Relations

Reader 1

Nancy Neiman Auerbach

Reader 2

Sean Flynn

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2017 Yijia Yang

Abstract

This paper examined the probability that the Chinese financial markets have been manipulated prior to the most recent three CPC National Congresses. Based on historical data, it used the Monte Carlo simulation to calculate the probability of the weekly and monthly percentage change of the SSE50 Index and the RMB to USD central parity rate one week and one month prior to the most recent 17th, 18th and 19th CPC National Congress. The results indicate that the weekly and monthly percentage change of both the SSE 50 Index and the RMB to USD central parity rate prior to all three Congresses would be extremely unlikely if both markets have moved in a manner consistent with their previous stochastic movements. It is highly likely that the Chinese financial markets have been manipulated prior to the most recent three CPC National Congress. This study also makes conjectures about manipulators’ motivations behind the market manipulation, assuming the existence of market manipulations.

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