The Demonstrative Research On Quantity And Time Effects Of Monetary Policy In China (1996-2003)

Since 1996, the central bank (People' s Bank of China) has implemented a series of monetary policies to adjust macro economy. It is very important to systematically measure the effects of the monetary policies, for we can summary the effects of monetary polices, and it will offer some useful thoughts in better our future monetary policies.According to the economic quarterly data of 1996 to 2003, and establishing the quantified variables of monetary policies (quantity and time effects), the author acquired the asymmetric effects of monetary policies and the long-term relation between policy tools (interest and currency supplies) and macro economy such as GDP, consumption, investment, etc. The Vector Auto Regression (VAR) and lmpulse Respond Function models are mainly used in analyzed the quantity and time effects.The analysis results reveal that the growth rate of currency supplies has larger effect on the macro economy than interest pol icy whether in long or short term. Secondly, the positive and negative disturbances of the supply of the real value of currency have asymmetric on real GDP at the 10% belief. Thirdly, the research also shows the time effects of different monetary policy tools are not same. From the current monetary policy circumstance, the mainly monetary tool should be the currency supply not interest rate. The central bank should also put importance to the time effect when carries out the monetary policy.