Model Based On The Mechanism Of Transfer Of Chinese Monetary Policy Effect Asymmetry

Whether a unified monetary policy's effect is symmetrical or not is a problem which economists consistently focus on. Early theory believes that effect of monetary policy should be symmetrical. But the practice of monetary policy proves the nonexistence of symmetrical effect. It was obvious that government failed to stimulate the growth of economic with expanded monetary policy in the Great Depression while succeeded in restraining the hot growth of economy and reducing inflation by having used the basically similar extent of condensed monetary policy. Since then, research on the effect of monetary policy concentrates on verifying the asymmetrical effect of monetary policy with practical data of different countries. Researching on monetary policy in the known economic cycle, economists prove that monetary policy acts in differences in economic expansion and depression. But document hardly concern that when should output in economic cycle be definite as shrink or rather hot, then to elaborate the asymmetrical effect of monetary policy based on that.With Chinese socialist market economic system reform develops, monetary policy, as a macro-economic policy mechanism, is more important than ever. After 30yeas'development of Chinese reform and openness, central bank functions deeper and stronger in society. Although some economists are verifying the asymmetry of Chinese monetary policy effect with recent years'practical data, the both variables they are using linear model to verify maybe don't exist linear relation. So the conclusion they got seems nearly perfect but in fact not real. For Chinese current economic practice, verifying the symmetry of monetary policy effect with the newest econometrics methodology to provide determination foundation for central bank and then to make much more practical monetary policy will be of important value. The dissertation considers the value both in theory and practice and uses some advanced econometrics methodology to evaluate Chinese monetary policy effect, then balances the effect of monetary policy and develops some political suggestion.Firstly, the dissertation makes a simple review for present nonlinear econometrics methodology, especially compares the newest regime switch model and evaluates the asymmetry of the effect of Chinese monetary policy with the method of the threshold-integration. Secondly, the dissertation makes the model automatically recognize which state the output or interest rate in economic cycle is, then through comparing with different mechanisms when economic cycle exists, analysis whether a unified monetary policy in different mechanisms appears different effects or not and gets the conclusion that there exists asymmetrical effect in Chinese monetary policy. Still with the nonlinear model, the dissertation confirms that in the course of macro-economic regulating of a same monetary policy, owing to the unbalanced development in Chinese regional economy and the inharmonious development in Chinese industry, may leads to absolutely different effects in different regions and industry. Finally, aiming at the asymmetrical effect of monetary policy above, the dissertation develops a solution for it and provides a basis for central bank's more reasonable monetary policy making.In the concrete, the dissertation demonstrates the asymmetrical effect of monetary policy from three levels with nonlinear model. The most principal of these is to evaluate the generally asymmetrical effect of Chinese monetary policy with the model of threshold-integration, and then survey the regional asymmetrical effect of monetary policy with the STAR model of panel data. In order to study the asymmetrical effect of monetary policy in whole, the dissertation at last evaluates the asymmetrical effect of monetary policy that may appear in industry.Through the model testified above, the dissertation first determines the target regions of economic growth rate and inflation rate of Chinese monetary policy. That is a regulating mechanism of monetary policy which is illustrated by data. When central bank predicts that there will have a deviation of economic growth rate and inflation rate from target region in practical economy, central bank transforms its monetary policy mechanism accordingly. When asymmetrical effect of monetary policy reflects that economic growth rate below the lowest level of target region, monetary policy should improve its reflective power for output breach while decreases its reflective power for inflation. Secondly, through research on the effect of monetary policy in output and price, the dissertation discovers that monetary policy shows obvious asymmetry in different industry's output effect and price effect. It not only appears on the directions that different industry reflect to monetary policy, but also appears on the velocity and extent. Finally, through researching on the crash to regional economic growth which is led from a transformation of monetary policy in regional deposit, the dissertation gets a conclusion that monetary policy exist regional asymmetrical effect.It is very popular to research the effect of monetary policy. The main innovation of this dissertation is:â… .research from a new angle, that means, discuss the asymmetrical effect of Chinese monetary policy with nonlinear model of regime switch. It breaks the old framework that previous study mainly adopted researching on the relation of nonlinear variables with linear model and provides a new methodology for future study.â…¡. The dissertation extends the conclusion of past research on the effect of monetary policy and succeeds in elaborating the threshold of economic growth and inflation. It doesn't simply explain the asymmetrical effect that produced on substantial economy by condensing monetary policy or extending it, and it doesn't simply emphasize that monetary policy regulates inflation better than regulates economic growth. The research of this dissertation much more emphasizes that when predictable economic growth rate and inflation rate above or under the threshold region, the reaction of monetary policy will have a mechanism transformation then makes the regulation to economic growth or inflation more outstanding.Comparing with other research on the effect of monetary policy, the main contribution of the dissertation is to study an old problem with a new method. Choosing regime switch model in the study of the effect of monetary policy is because this kind of nonlinear model has been applied to other subject and other questions in economic field about the nonlinear relationship existing in variables. For problems of the effect of monetary policy, traditional opinion basically stays on the recognition that the relationship between variables is linear and you can also get a conclusion nearly identical to practice by adopting linear model. So the research of the dissertation is not only a brave try but also provides a new breakthrough for adopting new method to future research on some old problems which are similar to the effect of monetary policy.Considering that the asymmetrical effect may exist in Chinese monetary policy, a reasonable suggestion is whether a unified monetary policy can be minutely adjust in a unbalanced economic development country especially for a country existing disharmonious development in regional economy and industry economy. So the dissertation suggests that in different period of economic development and in different region, even in different industry, on the basis of keeping the effect of central bank's policy, central bank can adopt some classified monetary policy and carry out different treatment. So the phenomena that the asymmetrical effect of some monetary policy aggravating the unbalanced development in region and industry can be eliminated. Our national economy will go into the orbit of healthy, continuous and harmonious development.Because it isn't a long time when Chinese carry out market-oriental economic system revolution and central bank regulates economy with monetary policy, and for the lack of relative data, it is inevitable that there still have some shortage in the dissertation. This question can be continually studied by future research, with new method and more materials in the future to make deeper study and elaboration.