Establishing Smooth Mechanism Of Transmission Of Monetary Policy In China

Mechanism of transmission of monetary policy's theory is a theory that is about through what channel monetary policy affects real economy. It is one of the decision -making factors for the monetary policy effect .It is not only one of the most important monetary policy .but also is a practical affair which the government have to face up to it. Since 1997 China has adopted a series of monetary policies to eliminate the negative effect that the Southeast Asian financial crises bring and to promote aggregate demand. Generally speaking, these measures have had an positive impact on our GDP .But there is still a comparatively great gap between the expectation and the reality .We find that the problem lies in that problems of monetary policy transmission mechanism is restricting more and more the effect of monetary policy. Later increased attention has been paid to establishing smooth monetary policy transmission mechanism. Therefore the study of establishing smooth monetary policy transmission mechanism is of great significance both in our nation's economics theories and in our practice at present.The thesis consists of three chapters. It starts with an introduction of monetary policy transmission mechanism theory, including fundamental concepts, operations and transmission channels .Here six monetary policy transmission channels are given. They are interest rate channel, credit channel, price of assets channel, wealth channel, exchange rate channel and anticipation channel. The paper puts emphasis on the former four channels and their working mechanism and restricting factors. In the second chapter, the dissertation firstly has a quantitative analysis of effect of monetary policy and interest rate transmission channel. Then Based on the monetarypolicy transmission channel above, current situations of interest rate channel .credit channel and price of assets channel are discussed in detail and transmission obstructions are found .1 point out in the aspects of interest rate, financial institution and financial market there are some restricting factors in the course of the monetary policy transmission . In the final section of the paper, on the basis of the previous chapters , some countermeasures and proposals are put forward to solve the sticking points existing in the monetary policy transmission process :strengthening development of financial market ; pushing interest rate's flexibility forward ; perfecting banking system construction ; improving credit policy ; making the macroeconomic environment better and other concerned measures.Creation points:1.The thesis focuses on the clew "central bank is the subject of transmission, bank system and financial market are the medi-agency of transmission enterprises and residents are the object of transmission".It analyzes the transmission obstructions from three aspects including central bank ,bank system and financial market,enterprises and residents.Bank system and financial market are discussed in detail. At last suggestions feasible to China are put forward .2. The thesis tries to combine our countrie's characteristics with the transmission theory. It puts more emphases on the interest rate channel,credit channel and prices of assets channel. In a dynamic eye, I point out interest rate channel and prices of assets channel will be the main channels of transmission of monetary policy.3.On the basis of current research, I summarize the prices of assets transmission channel.4.Quantitative analysis is used in the dissertation.