Research On The Use Of Monetary Policy In China's New Normal

Since the international financial crisis,the world economy has entered a deep rebalancing and re-adjustment period,this process continues.Affected by the financial crisis,coupled with structural problems accumulated over the years of rapid growth to gradually deepen,China's economy has entered a phase of three superimposed with growth shift,structural adjustment and early policy digest.Observing from growth change,structural adjustment,power conversion and other aspects,the feature of macroeconomics in the New Normal is quite obvious.Under the New Normal,environment for development and growth conditions are changing,which pose a major challenge for the application of macroeconomic policies.Faced with the"diseases of affluencet" of excess capacity and indebtedness under the New Normal,monetary policy remains an essential and important macro-control means.But how to implement monetary operations is a new problem under the New Normal both in theory and in practice,no experience can learn from history.In fact,the current monetary policy faces a dilemma,and needs to carry out research in terms of operation and theory to provide information and support for future implementation.Meanwhile,after the financial crisis,the role of monetary policy in macroeconomic management gets the attention of academic and policy circles.Traditional monetary theory framework have been repaired and improved,providing an opportunity for further improvement of the system of monetary theory.In this context,the case of China's New Normal and valuable experience of monetary theory reshaping provid fresh material to discuss on the use of monetary policy under the New Normal,and give the historic mission for the research.According to the writing mode of the layout and structure,using of empirical data and logical reasoning,the paper discusses about the use of monetary policy in China's New Normal to enrich and improve the related research and provide a reference for domestic monetary policy practice.First of all,from the perspectives of the economic cycle,financial market,asset price bubbles,monetary connotation,the transmission of monetary policy and the analytical framework of monetary policy,the paper has reconstructed the basic theory of macroeconomics and monetary operations to provide the basis for the expanding of follow-up study.Secondly,through the analysis of the long-term factors of economic growth such as economic cycles and changes in population structure,the analysis of the structural factors of economic growth such as the three major demands,industrial structure,regional economic structure,income distribution structure,and the analysis of the realistic dilemma about excessive debt and overcapacity,the paper conducts a comprehensive analysis of the characteristics of China's New Normal to gain a deeper understanding about the connotation of the New Normal and to explore the use of monetary policy in the New Normal.Once again,based on the analysis of Chinese evolution of monetary policy operating environment and currency credit cycle,the paper estimates and tests Chinese monetary policy transmission mechanism and money demand function using vector autoregression model and error correction model,to find quantitative tools currently still has important advantages.Model tests provide empirical basis for the choice of monetary policy instruments in the New Normal.And then,through reflection on the improvement and perfection of monetary theory after the financial crisis,enlightenment for the use of monetary policy in China's New Normal is obtained in theory.Based on these empirical and theoretical support,the paper constructs a new framework for monetary policy operations in the New Normal,to provide recommendations for domestic monetary policy operations.Meanwhile,the paper compares and analyzes the new monetary policy tools such as SLO,SLF,MLF,PSL,MPA and interest rate corridor,to provide recommendations and references for the use of monetary policy instruments in the New Normal.At last,the full text of the research are summarized and further studies are prospected.