The Study Of The Validity Of Chinese Monetary Policy

The monetary policy is that economy and the society develop into the result at certain stage, it is evolved from the development policies of the macroeconomics to the country progressive, its importance improves day by day as the paper currency is issued. When the paper currency replaces the metal money, the legal issuance of paper money may exceed the true demand of the currency of the economic activity, it will produce price rising too fast or inflation. And when the legal issuance of paper money is lower than the economic activity to the true demand of the currency, it will produce falling price or deflation, even result in the economic recession.This text is on the basis of the course that the monetary policy has carried out since the reform and opening-up of our country, combining the actual conditions of the social economy, analyzing the reason for the unremarkable effect of monetary policy of our country. Because the ability of the Central Bank of adjusting and controlling the basic currency supplies is relatively low, it is not smooth that the lending market of our country conducts the monetary policy, the change of the public expects causes the conduction mechanism of the monetary policy not to work, the interest rate control result in obstruction of the conduction mechanism of the monetary policy, the lash of the security market distorts the conduction mechanism of the monetary policy and the lack of independence of the Central Bank etc, which make the change of money supply unable to effect the economy. According to the economy and finance environment of the period of our country's economic transition, define the goal of the monetary policy , choose intermediary's index of the monetary policy properly, propose that our country should build the monetary policy rule combining money supply with interest rate index and make it to be the foundation of the Central Bank of making and operating the monetary policy in the transition period, and use monetary policy tool effectively , combining monetary policy with financial policy and administration means, improve the validity of the monetary policy of our country.This text is made up of four chapters .Chapter one analyzed the view of monetary policy's validity of theeconomist of different schools of though. In a word, doctrine economist Keynes thinks because of the salary and the price viscidity, the monetary policy can play a role in stabilizing economic fluctuation , but the new classical economist thinks the monetary policy is invalid. This text thinks that each school's different idea of the validity of the monetary policy is basically lies in that they have different supposes in economical operation . For instance, the elasticity of commodity price and salary, and people's anticipated impact on social economy, etc.Chapter two analyzes the practice of the monetary policy since reform and opening-up. In our country, the regulating action to microeconomics of interest rate has just began, the dynamics on function is still relatively limited. Although the impact on economic of change of the money supply is very direct, strong, the effect is not often the same with the policy intention , even fail to agree. It is ineffective when our country expand monetary supply to stimulate weak economy or decrease currency supply to suppress the overheating economy.Chapter three analyzes the reason for the ineffective monetary policy which take money supply as intermediary's goal of our country. This is not just because money supply can't examine the controllable factor increase greatly , the more important thing is , the factors of restricting the validity of monetary policy of our country is very complicated, involving economic banking system , market development degree , microeconomics behavior and relevant cooperation of economic policy wait a moment for the respect.Chapter four puts forward that we should regard price stability and economic growth as the goal of the present monetary policy. In the transformation period from our country's planned economy to market economy, we should set up a mixed monetary policy which combine interest rate index with the money supply as the basis of making and operating the monetary policy of Central Bank in transition period, and rising some suggestion of improving the effect of monetary policy of our country.