Dynamic Econometric Analysis Of The Impact Of Monetary Policy On Total Factor Productivity

In recent years,China's economy has developed by leaps and bounds.The scale system of many industries and the level of technology are far ahead of other countries in the world.China is standing among the world powers as a superpower.However,the problems brought by rapid economic development should not be ignored,such as excess production capacity,occasional increase of international environmental trade barriers,gradual loss of demographic dividend,and abnormal industrial structure in some industries.It can be said that China's economic development has entered a new era.The traditional mode of economic development which mainly relies on increasing capital and labor force can no longer fully meet the needs of long-term economic development.Therefore,promoting the improvement of total factor productivity and the utilization efficiency of resources is an important means to promote economic growth in the new era.To improve TFP,an important question from the perspective of policymakers is how monetary policy affects TFP.Most previous studies on total factor productivity take total factor productivity as an exogenous variable,measure its value or analyze its impact on other variables,and there are few studies that really study what factors affect total factor productivity.By taking total factor productivity as an endogenous variable,this paper gives the way of technology evolution and the whole process of technology from R&D to adoption to production and then to market in the form of products,and finally forms a relatively complete constraint equation according to the expansion model of the new Keynesian model.In this way,total factor productivity is intrinsically related to a series of variables such as interest rate,money supply,R&D expenditure and consumption,and thus the theoretical relationship and transmission mechanism between variables are constructed.Through the finally obtained total resource constraint equation,we conclude that theoretically,R&D expenditure,money supply and consumption are positively correlated with TFP,while interest rate is negatively correlated with TFP.After to test the results,this article selects the GDP growth rate,consumption rate,interest rate,the broad money supply growth rate,growth rate of R&D spending and total factor productivity that several variables,then using the time-varying parameter vector autoregressive model to dynamic effect of monetary policy of China's total factor productivity has carried on the empirical test and analysis of the effect of monetary policy changes on the total factor productivity of degeneration.In the whole analysis process,we found that the effects of R&D expenditure growth rate,interest rate,broad money supply growth rate and consumption growth rate on total factor productivity all showed obvious time-varying characteristics,and the influence degrees of each variable on total factor productivity in different periods were significantly different.The empirical results obtained by using TVP-VAR model show that increasing R&D investment in the short and medium term can promote the growth of total factor productivity.Money supply also has a positive effect on TFP in the short and medium term.At the same time,stimulating consumption in the short term will indirectly improve the level of total factor productivity.In the medium and long term,the impact of interest rate changes on total factor productivity is negatively correlated,while in the long term,the impact of broad money supply and consumption is not significant.Combining the actual state of the economy of our country,it is easy to see that the source of enterprise development fund is mostly through the credit channel,interest rates of increase is bound to increase development costs,reduce enterprise development power,the increase of the broad money supply will make it easier for companies to obtain funds,thus increasing investment,stimulating development promote productivity level.Therefore,when formulating monetary policy,lowering interest rate,a price-type regulation tool,and increasing broad money supply,a quantitative policy tool,are all conducive to the improvement of TFP.Through empirical analysis,we also conclude that the impact of total factor productivity on GDP growth rate is more focused on long-term positive effects.Therefore,if China wants to get rid of the problem of economic growth relying on resource accumulation,it must pay attention to total factor productivity.