The Research On Intermediate Targets Of Monetary Policy In China

The key content of this dissertation is to study the superior and inferior of a variety of financial variables functioning as intermediate targets and the arrangements of intermediate targets of monetary policy. The whole dissertation is developed in accordance with the following proper order: the theoretical analyses of intermediate targets of monetary policy, the historical evolution of intermediate targets of monetary policy, and the positive study on validity of some related financial variables acting as intermediate targets.First, for the part of theoretical analyses, the author analyzes the properties and functions of intermediate target of monetary policy. Later on, the author makes a comparative study of some related theories coming from Keynesian school, Monetarism school and Post-Keynesian school. As for these theories, reasonableness exists in each school. Moreover, theoretical dispute and theoretical analyses of monetary transmission mechanism have provided guidance and theoretical support for the following positives analyses.Second, the author studies the history of intermediate targets of monetary policy of main western countries, and summarizes its general tendency and developing law, which, to sum up, are as follows: the choice of intermediate targets are closely related to the native economic developing surroundings, characteristics and financial situation; the more serious inflation becomes, the more attention is given to monetary aggregates as intermediate targets; with the stable relationship between monetary aggregates and variables as goals of central banks being damaged by financial innovation and some other reasons, most countries either give up or give less attention to monetary aggregates; the pluralism of intermediate targets ,the separation and dispersion of the function of traditional intermediate targets have become the worldwide fashion, from which China could gain a deal of enlightenment.Finally, for the part of positive analyses on intermediate targets of monetary policy of China, three sections are developed properly. First, the author qualitatively analyzes the superior and inferior, and possibility of a variety of financial variables functioning as intermediate targets of monetary policy. Excluding variables like prices of stocks, the author comparatively analyzes the relationship between three types of variables (money supply, loans, and interest rates on China interbank) and the pricesand output by using several econometric methods, which proved that the most notable variable influencing prices and output is money supply M1. However, loans and interest rate on China interbank also include the information of prices and output, and are correlated with them to different extent. Comparing these three types of variables in different periods of time, the author find that the correlation of them and goals of monetary policy, and the function of them in forecasting on goals tend to decline.Next, more importance is attached to analyzes the validity of monetary aggregates as intermediate targets. The research is carried out at three aspects: (1) new ways are used to evaluate the effectiveness of Chinese central bank s controlling money supply in the past decade, which turned out that the effectiveness of Chinese central bank s controlling on money supply of this period is somewhat satisfying; (2) The differences between monetary endogeneity and monetary controllability are recognized for the first time, and the influence of monetary endogeneity on monetary controllability is analyzed; (3) A positive study on controllability of money supply in China is carried out in aspects of prediction of money multiplier and the controllability of central bank on basic currency, which shows that current money supply is basically able to meet the requirements of controllability.Then, the author probes into the influence of legitimate base interest rates on deposits and loans on investment and saving deposits, and further studies the relationship between interest rates of deposits and loans, and prices an...