The Study Of Chinese Monetary Policy Validity In The Open Economy System

The effectiveness of monetary policy is an important issue of combination of both theory and practice. The arguments and researches of Chinese and western scholars on this issue have never stopped. In the open economy system, Globally financial liberalization, financial internationalization and financial innovation have greatly changed the environment that the monetary policy is based on. These factors have great influence on the effect of the monetary policy .The influence on economy become complicated and uncertain.The theoretical and practical researches show that the effect of monetary policy in the open economy should be more obvious than that in the closed economy. But in the last years, the effect of Chinese monetary policy on stimulating economy and alleviating the pressure of deflation is not remarkable. Besides the domestic restrictive factors, the influence of open economic environment on monetary policy should not be ignored. From the analysis of Chinese certain economic and financial environment, the internal and external equilibrium conflict restricts the effectiveness of monetary policy. The internal and external equilibrium conflict lies in the rigidity of the exchange rate system and the inconsistency of home and foreign currency policies. And the quickening of capital flow also urges us to make a new choice on policies.On the general trend of open economy, The west countries have adjusted their monetary policies in succession .we should learn their successful experience , probe into the framework of monetary policy again and make a new choice on the ultimate goals?intermediate targetS? instruments and transmission mechanism of monetary policy, gradually construct Chinese financial market , harmonize the policy of exchange rate and monetary policy , and take part in the construction and reform of international monetary system , then bring the effect of monetary policy into full play.