Studies On The Structural Effects Of China’s Monetary Policy And Coordination Development

Monetary policy is an important counter-cyclical method to sustain and stabilize economic growth, especially during the period of financial crisis and economic boom. The macroeconomic transmission of monetary policy is the crux of the matter. Through macroeconomic transmission, central bank can influences money supply, interest rate adjustment and other policy instrument effectively. We can say, the essential measure of monetary policy transmission performance is that whether all the microeconomic entity, such as households, firms, commercial banks and local governments’ optimal behavior selection is consistent with the objectives of the central bank’s policy. On the contrary, if each of the microscopic behavior inconsistent with policy, structural effects of monetary policy will not only reduce the regulatory effect, but also widen the gap of development in regions and industries. Therefore, it has theoretical and practical significance to study micro-foundation and formation mechanism of the monetary policy structure effect.In order to illustrate the micro-foundation and the formation mechanism of China’s monetary policy structural effects, and to build China’s monetary policy operational framework for coordination development, the research proceeds as follows: At first, based on the theoretical analysis, this project combs theories of asymmetric monetary policy transmission effect, regional effects, industry effects, etc., then combined with China’s actual economic data. By using the SVAR model and LSTVAR model, I made empirical test in Chinese monetary policy transmission asymmetric effects, regional effects and industry effects. The result indicates that the monetary policy in a way has the structural effects in China. Secondly, I analyzed microscopic behavior of residents, businesses, commercial banks, and the local government in monetary policy transmission process. Also I focused on the structure effect of monetary policy, when maximizing utility of residents, minimizing costs of businesses, maximizing profits of commercial banks and maximizing social welfare in the local government. Thirdly, I constructed the new Keynesian DSGE model with spending habits preferences, the new Keynesian DSGE model with nominal stickiness, and the new Keynesian DSGE model with financial accelerator effects. I also analyzed asymmetric effects on China’s monetary policy, regional effects in the Bayesian estimation methods and numerical simulation, as well as the microscopic mechanism of the industry effect in simulation. Finally, I provided some policy recommendations on the base of the empirical testing and simulation results, included: reducing consumer habits to appetite, lowing business investment viscosity, promoting financial market reform and government tax reform in micro-level. While, I also gives macro-control reform measures to promote coordination development in China’s economy, such as maintaining the relative stability of monetary policy, smoothing fine-tune the policy, the implementing the different monetary policy, and strengthening coordination of monetary policy and fiscal support policies and so on.Through the study in micro-foundation of Chinese monetary policy structure policy effect and monetary policy coordination, I got the following innovative conclusions. For example: the higher consumer habits preferences are the main cause of China’s monetary policy asymmetric effects; the impulse of the local government investment is an important cause of monetary policy regional effects in China; sticky business investment is also an important cause of China’s monetary policy industry effects. I put forward the concept of sticky business investment, which means the sticky theory extend to investment. I analyzed the formation mechanism of business investment sticky and counter-measures. In designing the optimizing macro-control system, I introduced the concept of "the relative stability of monetary policy", and discussed measurement formulas, the related factors and other aspects. I believe it will provides a useful reference for monetary policy operations for continued coordinating economic development in China.