Table 3: Causal relationships between the banking measures, inflation expectations, and the Shanghai A-index.

Causal Relationship Coefficient Sum Chi-Squared Statistic Number of Lags Confidence Level Banking Business → Shanghai A −0.023 0.937 1 66% Shanghai A → Banking Business 0.041 5.387 1 98% Bankers’ Confidence → Shanghai A −0.311 6.516 1 98% Shanghai A → Bankers’ Confidence −0.230 0.814 1 63% Current Price Satisfaction → Banking Business −0.050 2.214 1 86% Banking Business → Current Price Satisfaction −0.239 0.026 1 13% Future Price Expectation → Banking Business 0.149 16.815 1 99% Banking Business → Future Price Expectation −1.104 0.951 1 67% Current Price Satisfaction → Banker’s Confidence −0.644 1.880 1 83% Banker’s Confidence → Current Price Satisfaction 0.060 0.375 1 45% Future Price Expectation → Banker’s Confidence 0.740 1.761 1 81% Banker’s Confidence → Future Price Expectation −0.062 0.846 1 64% Current Price Satisfaction → Shanghai A 0.424 1.593 1 79% Shanghai A → Current Price Satisfaction −0.299 6.127 1 98% Future Price Expectation → Shanghai A 0.000 0.000 1 0% Shanghai A → Future Price Expectation 0.117 1.588 1 79%

Note: The above statistics reflect Wald tests for Granger-causality based upon VARs estimated with one lag on each variable (all of which are in log growth rate form); relationships significant at the 90% confidence level or higher are depicted in bold print.