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Test And Analyze The Quantitative Effects Of Chinese Monetary Policy

Posted on:2005-01-14Degree:MasterType:Thesis
Country:ChinaCandidate:Q Y DanFull Text:PDF
GTID:2156360122486603Subject:Statistics
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The effectiveness of monetary policy (EMP), as one of the most important and pendent problems in the field of monetary theory, is always the focus people discussed. The macro control model of monetary policy in China has undergone fundamental changes from 1993, when the Peoples' Bank of China began to take the quantity of monetary supply as the immediate target of monetary policy. However, since 1998 we had to face the problem of weak demand in our country. Though the Central Bank adopted series of measures to stimulate economy, no one would agree that such operations did the job. Therefore, more and more scholars began to study the effectiveness of monetary policy. Do the quantitative effects of monetary policy exist in China? Can China's monetary policy transmission mechanism operate well? These are the problems our article deals with.Now there are lots of papers on evaluating monetary policy of China, but most of them study by qualitative analysis. However this way is not as precise as quantitative analysis. On the other hand, the problem of EMP contains numerous preconditions, so the reference values of the qualitative study is limited, they cannot answer exactly in what degree the monetary policy affects the economy. Based on existed theories, this dissertation systematically studied the quantitative effects of Chinese monetary policy. And the main task of this article is to measure the quantitative effects of monetary policy on the investment, consumption and net export accurately by applying the newest econometric approaches, such as Cointegration Test, Granger Causality Test and Impulse Response Function. Since Central Bank began to implement indirect control in the year of 1993, we sample the data from 1993 to 2003.Through detailed quantitative analysis, we get several results: firstly, the surge of the monetary supply can arouse the change of the real value of investment and the real value of consumption, so in China the quantitative effects of monetary policy should be exist. Secondly, the quantitative effects of Chinese monetary policy on the investment, consumption and net export are differently. Except that the surge of the monetary supply arouses the change of investment notably, it influences the consumption limitedly and it's even ineffective to net export. With these results, we conclude that the limited effects of monetary policy to consumption and ineffectiveness to net export should be the direct reasons why in China the monetary policy could not stimulate economy quickly since 1998.
Keywords/Search Tags:Monetary Policy, Quantitative Effects, Cointegration, Granger Causality Test
PDF Full Text Request
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