The Necessity And Path Selection Of Monetary Policy Coordination Between China And The United States

With the increasing integrity of global economics,the economic interdependences between countries are deepening,and economic policies take effect not only on domestic economic variables,also on other economies through transmission mechanisms.Since subprime mortgage crisis,the supernormal quantitative easing policy launched by the Europeans and Americans made spill-over effect problem of monetary policy and international monetary coordination problem again the focus of international economics community.Former literatures focus on monetary policy coordination problem between developed countries,rarely on necessity and coordination mechanism of Sino-American monetary policies.This thesis based on international economic mutual dependency theory,under dynamic stochastic general equilibrium analysis framework,studies on necessity and mechanism structuring problem of Sino-American monetary policies coordination combining nominative study as well as empirical study.Firstly,this thesis comes up with studying objective with monetary policy choices of both China and America since subprime mortgage crisis,analyzes studying background,explains studying significance,and introduces thesis structure and innovation.Secondly,this thesis introduces different points of views of international monetary policy coordination related literatures,explains motivation dynamics,benefits,and realizing approaches of monetary policy coordination.This thesis then introduces international coordination experiences according to historical development sequences,which explains contents,effects and inadequacy of these policies in the way of literature review laying a reference for establishing Sino-American monetary policies coordination.Chapter Four and chapter five mainly analyze the necessity of Sino-American monetary policies coordination.Based on international economic interdependence theory,this thesis,citing data from China and America with SVAR model,study empirically on economic mutual dependency characteristics of China and America,which concludes that there is positive correlation for output fluctuation between China and America,and the spill-over effect of monetary policy is also significant which lays foundation for Sino-American monetary policies coordination.Then,this thesis analyzes welfares of Sino-American monetary policies coordination based on dynamic stochastic general equilibrium model by Alan Sutherland(2002)and Wolfram Berger(2007),which concludes that Sino-American monetary policies coordination which can improve welfare level so long as goods substitutive elasticity is not 1 is necessary.The contribution of this thesis is that it develops analysis of the effect of two countries goods substantive elasticity ? on monetary policy coordination,which offers theoretical basis for Sino-American monetary policies coordination.Chapter six designs contents and safeguard measures for Sino-American monetary policies coordination.This chapter compares the monetary policy object and instruments of both China and America,explains fundamental ways of monetary policies coordination and concludes specific coordination schemes.Related suggestions include establishing comparatively independent monetary coordination permanent bodies,strengthening strategic and economic conversation,launching currency swap scheme between central banks.This thesis also shows opinions on picking central exchange rate and setting exchange rate target zone.Finally,this thesis points out problem and reasons of monetary policy selection and coordination measures of both countries,and gives suggestions of taking part in monetary policy coordination for China,which include enhancing coordination of exchange rate policy and monetary policy,improving monetary policies coordination environment and capabilities.The main contribution and innovation of this thesis are as follows:This thesis develops necessity studies of Sino-American monetary policies coordination,pointing out that economic interdependency and spill-over effects are the main reasons for Sino-American monetary policies coordination,analyzing sources of spill-over effects and its influential facts,developing influencing facts studies on coordination welfare emphasizing perfection degree of financial markets and goods substitutive elasticity of both countries.This thesis innovates on Sino-American monetary policies coordination mechanism studies,designing the mechanism based on current monetary policies selection ways of both countries,offering perfection mechanism after analyzing obstacles existing in Sino-American monetary policies coordination,giving specific coordination suggestions following the most updated economic situation and policy adjustments of both countries.