Quantitative Tools Or Price-based Tools

Chinese financial market and monetary policy transmitting instrument grow with the development of Chinese economy. It can be seen from this round macroscopic adjustment and control that traditional credit channel has not undertaken the adjustment and control major channel of monetary policy transmission like before. Central bank has began to flexibly use interest rate lever and monetary policy adjustment method seem to begin to gradually transfer from quantity type policy instrument to price type instrumentFrom the change above, it should be believed that financial market has played an important role in China economy. But as for the theoretic research, more crucial thing is to understand the impact that financial market has on the monetary policy transmission. It is a pity that existing literature on monetary policy transmission can not provide a ready-made logical frame. In the 20 century 80s, Chinese monetary policy always attached more importance on the money demand and supply. After 90s, the research on policy ultimate and middle objective and policy instrument largely came forth. Otherwise, some research discussed Chinese monetary policy transmission mechanism, the relationship with financial structure and monetary policy transmission mechanism and monetary policy validity as well. Because the characteristic is that Chinese Commercial banks play a leading role in financial system, Chinese monetary policy is adjusted and controlled more via credit policy and discussion on credit market is provided accordingly, but it is difficult for us to see the research on transmission mechanism between financial market and monetary policyFrom the point view of theory development , I believe that someone wants to try to research on this field though he was called a halt. For example(l) In the system environment, money demand is not stable, money supply has inner productive feature and the relativity and reliability of interest rate qua agency objective has reduced, so the effectiveness of monetary policy is sure to fall. (2) With the Chinese credit objective giving up, the interest rate flexibility of money supply quantity is very low and commercial banks have not been separate interest principle parts yet, they are not able to make choices according to monetary policy, so it is obviously shown that the interest rate policy has low distinction. (3) Marketing action of Chinese corporation qua micro-main party is not healthy, financial market is not perfect and interest rate and GDP lacks relation etc. The explanation above shows the disadvantage as to the part of monetary policy transmission's shortcomings and it lacks review on depth and width of monetary policy implement from financial market. The reason is that in the implement of research and practice, the macro-analysis angle and way of thinking is more from the top to bottom. The explanation is short of the research on micro-unit which for example, investigate corporations and inhabitants on monetary policy anticipated mechanism, short of the research on central bank and micro-unit game method and short of the research on announcement impact that financial instruments have on market and observation results. On the basis of short-term impact caused by monetary policy, the article makes research on the change of inhabitant anticipated action and game relation between the two.On the way of the research on monetary policy, following the money neutral theory and Keynes, Friedman indicated that adjusting and controlling the money quantity which include money turnover and money storage in the economy society and price level become core objective of monetary policy research. Sargent and Wart las(1975) ), Kydland and Prescott (1977) , Barro and Gordon(1983)(1983)etc. indicated that whatever policy instruments are, if money authorities deviate from beginning strategy in whatever stage ,for example which deviate from established anti-inflation aim, it will trigger public revenge , that is improving inflation anticipation in order to pay expensive price for money authorities' anti-inflation. The article researches on only one hand, but how the change of financial market price have impact on inhabitant anticipation and what financial instruments we need to observe the macro-economy and micro-economy action and express policy meaning. From the current situation, the shortage and dispute of research on transmission instruments in china financial market focus on these aspects:Firstly, how to impact economy? Through money market channel or credit channel? Credit channel should meet two demands in money policy transmission mechanism, the first point is that some money borrowers relay on bank loans, and the second point is money policy can change the supply quantity of loans relative to other forms of credit. The second condition is to ask central bank to be able to indirectly adjust and control commercial bank credit actions. As Chinese micro-system basis of commercial bank is under transformation age and market structure is changing , how's the influence of central bank indirect adjustment and control arouse much dispute and discuss.Secondly, the financial market is short of the research and analysis on micro-unit inhabitants action. In many channel researches, whole way of thinking follow Keynes method, embody that the lack of inhabitant and corporation action research inevitably result that money transmission mechanism research is short of foundation. Unhealthy social security system and few financial capital provided cause a quantity of social capital accumulate in commercial bank which enhance the difficulty of central bank recent adjustment and control and also increase the pressure of central bank long-term adjustmentand control.Thirdly, at present, is it more important to adopt price type instrument or quantity type instrument? How the financial market play this role? How to exert instrument observation and announcement effect? The investigation of these efficient instruments is very primary which directly disturb the realization of central bank adjustment and control. The logic frame of the article is: the chapter one will test money policy effectiveness through Philips curves and analysis on Chinese inhabitant anticipation in order to lay foundation for the article; The chapter two indicates the Chinese nominal price impact and existing Chinese nominal rigidity through islands model and its extension in order to explain that price rigidity plays a key impact on Chinese money policy. In the short-term, micro-units face the problem of signal filtration and welfare loss; Through VAR value test and cause & effect analysis of credit and money channel, the chapter three indicate that although credit channel play a very important role in china, it is not suitable to become the main channel of Chinese money policy transmission and the method of putting in credit through controlling money supply quantity should arouse thoughts. Through Poole model . Model and practical testing and examine, chapter four and chapter five point out that at present Chinese general and money demand interest rate flexibility is very low at large, but impact of money demand is very large. Relative to less sensitivity of total outlay interest rate, interest rate weak sensitivity of money demand is easier to be rectified which cause interest rate instruments will show that price type instrument is better than quan type instrument , what is more principle is that the development of financial market can establish the function of nominal anchor which is convenient to policy aim announcement and effect observation; Through consumptive CPAM model, chapter six shows that the system background of financial market development and necessity and direction of financial market development. Chapter seven indicates that though interest rate is not the only term of credit restriction, China need to vigorously develop bond type products because Chinese stock right leash intervention and the validation cost of bank loans. The article try to explain the problems hereinafter:...