Research On Monetary Policy In China - On Monetary Policy, Credit Conduction Channels

Beginning with the study of China's monetary policy, I grasp the credit channel of transmission as the chief issue of my graduation thesis. After the brief introduction and analysis of major theories concerning the credit channel of monetary policy transmission, I use many standard methods, such as experience analysis and comparative analysis, to comment on the theme. In this paper, I mainly focus on the following problems. Firstly, whether the credit channel is the most important channel of China's monetary policy transmission. Secondly, in recent years, the credit channel tends to weaken and influences the effectiveness of our monetary policy. Thirdly, what's the reason of weakening trend of China's credit channel. On the first question, I study the historical development of China's transmission mechanism of monetary policy, compare the credit channel with other transmission channels, and analyze the prerequisite of credit mechanism of monetary policy transmission. About the second problem, I choose the weak effectiveness of monetary policy as my starting point, and come to a conclusion that the main reason is weak credit mechanism of monetary policy transmission. On the third question, I analyze the central bank, financial market, financial institution and the subject of microeconomy in turn. In the end, I draw a conclusion that the reason is not only one aspect has problems, but all the four aspects have different factors to hinder monetary policy's smooth transmission. In the last chapter of this paper, as a summary, I put forward seven suggestions, in order to help China's monetary policy play a more positive role in the near future.