Signaling Function Of Chinese Monetary Policy

Monetary policy is one of the important macroeconomic policies of a country. It is the main duty of the central bank to formulate and implement monetary policy and carry out macroeconomic regulation to national economy. As an important method of indirect macroeconomic regulation, monetary policy holds a very important position in the macroeconomic regulation system of Chinese national economy. With the approaching of the opening deadline of Chinese financial business, Chinese monetary policy, under the opening economic conditions, will face a more rigorous test. What should be done to reform and perfect monetary policy ,to play the signaling part of monetary policy and to create a good environment for it ,so as to serve the constant and healthy development of economy.The article consists of four chapters. Chapter One introduces the general theory of the signaling function of monetary policy. Firstly, it defines some important concepts combined with the documents concerned , and especially gives the economic concept to the signaling function of monetary policy, which is the foundation of this study. It analyses emerging, transmitting and distorting of monetary policy signals with the market theory of western economics and the information asymmetry theory of information economics.Chapter Two introduces the signaling function of American monetary policy. First, it makes clear the signaling function of American monetary policy. Federal Reserve affects the supplying and demanding relation of the whole market by the monetary policy signal of adjusting the interest rate slightly for many times, so as to keep a constant and healthy development of American economy. Then, it introduces the signaling function of American monetary policy. The signaling function of American monetary policy is completed through marketing interest rate and highly single monetary supplying channel. At last, it analyses the conditions of clear signals of American monetary policy. Large-scale national debt and highly marketing macro-foundation is the foundation to embody the signaling function of American monetary policy.Chapter three focuses the analysis on the signaling function of our Chinese monetary policy. Firstly, it analyses the adjusting of Chinese monetary policy in different stages and its effect by comparing with the actual situation of the signaling function of the American monetary policy. Secondly, it analyses the running environment of Chinese monetary policy, that is , the macro and micro environment of Chinese monetary policy at present stage. Lastly, it analyses the obstacles of preventing the signals of Chinese monetary policy from working, both macro and micro, non-marketizing factors and the phenomenon of information asymmetry.Chapter Four gives some suggestions and measures to strengthen...