The Extent Of Credit Rationing And Its Influence On The Effect Of Monetary Policy In China

Banking credit rationing attracts scholars' attention since the end of last century in China. The thesis studied the extent of credit rationing and its influence on the effect of monetary policy.First, the thesis described the behavioral characteristics of banking credit rationing and its variety on extent in China, taking the domestic and international theories about credit rationing as the foundation. Theoretical explanations of behavioral characteristics of banking credit rationing and the specified factors that affect banking credit rationing were unveiled. After bringing the extent of credit rationing into the IS-LM model and analyzing the effect to the monetary policy that comes from the variety on extent of credit rationing, the thesis combined monetary policy and its performance of our country, and then making use of macroscopic monthly economic data since 1996, took empirical tests to the extent of credit rationing along with its variety, and the effect of this variety to the monetary policy of our country. The result of tests well support the view of this thesis.The thesis makes a deep study on the extent of credit rationing and its influence on the effect of monetary policy in China from phenomenon description, theory analysis and empirical tests. During transformation period, the special factors in relation to bank credit affected the extent of credit rationing. These factors included evaluation criteria for banking performance, credit environment, guaranteeing condition for bank loan and interest adjusting policy. The change of these factors led to the change of the extent of credit rationing.The change of the extent of credit rationing affected the effect of the monetary policy. During the period of 1998-2000, our country implemented a moderate loose monetary policy. But the extent of credit rationing had been aggravated during that period, so the effect of monetary policy is not as desirable. 2001-2003 period our country was continuing its implementation of loose monetary policy. At the same time the extent of credit rationing was somewhat lessened and had thus achieved a good result of monetary policy. After the year 2004, our country had gradually shifted to comparatively tightening monetary policy. As the extent of credit rationing has already been lessened, the effect of tightening monetary policy had eventually been weakened. The thesis gives a new explanation on the instability of the monetary policy effect in China since the year of 1998.