Study On The Effect Caused By The Development Of China's Stock Market On Monetary Policy

In history, because the scale of stock market was small, the effect caused by stock market on monetary policy did not attracted economists. Since 1970's, the stock markets of major developed countries have been continuously deepening under the impetus of financial innovation and financial liberalization. This has brought new challenges to the traditional framework of monetary policy. Economists are impelled to carry out new study theoretically, and central banks are forced to take measures positively in practice.Since 1991, China's stock market has developed swiftly and has influenced monetary policy to a certain extent. But the domestic studies on this question are still at the starting stage and are not systematic. Most studies concentrate on introducing theory. The analyses of real example are relatively few. The analyses that combine theory with real example are even fewer. In practice, People's Bank of China sometimes takes into consideration the effect caused by stock market on monetary policy. But such consideration is neither comprehensive nor sufficiently supported bytheory.This thesis sticks to the main thread of the connection between theory and reality. By combining real example analysis with standard analysis, this thesis systematically analyses the effect caused by the development of China's stock market on the three main parts of monetary policy: final goal, transmission mechanism and intermediate goal. The conclusions and suggestions from the analysis will be useful in some degree to the perfection of China's monetary policy.