Study On Benign Interdynamic Mechanism Between China's Stock Market And Monetary Policy

With the presenting of finance mixing and perfection of the stock market of our country, the formulation and execution of the monetary policy have received the impact from stock market. Can be found out to practice from the monetary policy since 1996, the reducing of the interest rate and increase of the money supply haven't droved economic development to a great extent, while consumption demand and investment demand remain unchanged weakly. But the stock market has experienced the bull market which has been as long as one and a half year since 1998.This proves that there is some distributaries to get to the stock market in effect of the monetary policy. Besides, the ups and downs of the quotations on the stock market influence consuming and investment, and then influence the operation of the monetary policy. Mutual relations between the China's stock market and the monetary policy becomes one of the topics which academia and policy authorities pay close attention to generally of now. We believe there are certain mutual relations between the stock market and monetary policy through observations of international experience and deeply thought of theory. In the article, the author uses the modern standard analyzing and empirical analyzing, and study the interdynamic relation between the stock market and the monetary policy from theory and practice.This text is divided into four parts:Part I analyzes the necessity to set up the interdynamic mechanism between the stock markets and the monetary policy from three aspects. Firstly, the influence of monetary policy final goal, intermediary goal, policy tool and conduction mechanism from the stock market is explained. Secondly, the impact on stock market from the monetary policy changes is analyzed from the angle of the interest rate and money supply. Lastly, It is analyzed that economic development needs the building of benign interdynamic relation between the stock market and the monetary policy with the finance integration becoming deepened.Part II mainly analyzes the feasibility of the interdynamic mechanism's building between the stock market and the monetary policy. From the realistic states of the stock market and the monetary policy, it is explained that whether the mutual relation is or not and what the degree of interdynamic relation between the stock market and the monetary policy.Part III carries on the empirical research to the interdynamic relation betweenthe stock market and the monetary policy with the quantitative method mainly. It takes a broad view of the scientific findings of learning sphere until now .and the majority from partial or one-way analyzes problem, for instance the impact on economic growth of the stock market, and impact on money supply of the stock market, etc.. Though the empirical method is used ,but the false regression is not considered, so the majority of conclusions drawn was not reliable . In view of this, the author using VAR model and impulse response methods, etc from the angle of whole, draws a conclusion that the interdynamic relation is weak between the stock market and the monetary policy.Part IV proposes the measures and methods setting up benign interdynamic mechanism between the stock market and the monetary policy. Based on the front deep qualitative and quantitative analysis, this text proposes pointedly here six suggestions: First, Central Bank should include the stock price in the field of vision of monetary policy. Second, the operation in the open market is used mainly. Third, the bank fund is pushed into the market steadily. Fourth, the market-oriented pace of interest rate is accelerated, and then the conduction effect of the interest rate is improved. Fifth, the micro foundation of the stock market is tamped, and the stock complete circulation is realized, and the mechanism of withdrawing from of the stock market is perfected, and the function that the stock market conducts the monetary policy is embodied progressively.. Sixth, the money market is developed energetically, financial supervision is streng...