Chinese Monetary Policy Transmission Mechanism

Since the seventies of the 20th century, the securitization of global economy have been becoming an irreversible tendency virtually, the capital market taking stock market as subject deepens and widens day by day, such institutional change has proposed a series of new challenges to the monetary policy, including the transmission mechanism of monetary policy relying mainly on bank credit. The development of capital market has increased the way that the monetary policy transmits effectively, made monetary policy get rid of the single transmitting mode and then increased the alternative and flexibility of the monetary policy, but the monetary policy is how to have an effect to real economy through the stock market, and what the inherent mechanism is, the domestic and international scholars do not have unanimous conclusion so far.Our country set up stock market at the beginning of the 1990s last century. During the last ten years, with the aid of rapid development of China's economy, our stock market have made great progress, not only the quantity of listed companies but also the money scale collected increasing quickly, which have made indelible contribution for the economic construction of our country. The development of the stock market changes people's economy and finance life truly, influencing the appearance of the whole national economy. Meanwhile, the development of the stock market is changing the traditional monetary policy transmission channel, and the stock market has already become an important factor that can't be ignored of influencing monetary policy validity. Therefore, studying the stock market transmission theory of monetary policy and practice situation in our country not merely has a great theory meaning, and still have suitable realistic practice meanings.This text proceeds with meaning of the transmission mechanism of the monetary policy, has introduced, in an all-round way, the general monetary policy transmission theories which are prevailing in the west countries, then turn the visualangle to the concrete research field of stock market on this basis, narrated the macro-influence of the development of the stock market to the monetary policy transmission, and studied the micro-way that the monetary policy of stock market transmit carefully. As important part, the text has analyzed Tobin's Q effect, manifesting how stock market price change have an effect to investment demand, and the wealth effect, showing how stock market price change have an effect to consumption demand. After introducing the theory of stock market transmission of the monetary policy totally, I combine the data materials since the establishment of the stock market of our country and have an empirical analysis to the theory that is explained above, in order to judge whether the monetary policy transmission mechanism of stock market in our country is unobstructed. The empirical analysis have three parts: first, the impact on stock market of implementation of the monetary policy; second, the wealth effect of the stock market; third, Tobin's q effect. Finally, standing on the height of the history and strategy, this text pondered over the monetary policy transmission of stock market more deeply, given the conclusion of the empirical analysis conducted above, and provided some policy recommendations on deepening and developing the stock market of our country.