Analysis On Effects Of Monetary Policy Tool In China

Monetary policy tool is an important tool of macroeconomic regulation, it's effects on economic development and price stability have an important role. At present, the phenomenon of asset prices significantly deviating from real economy has frequently appeared, therefore, not only to control output and the general price level, monetary policy has to concern and even regulate asset prices in order to ensure economic growth and overall price level stable. With the method of theoretical and empirical analysis, the article discusses improving the function of monetary policy tools and operating environment policy measures.Part I is introduction, including research background and significance, literature review, as well as it`s innovation. Research literatures on monetary policy tool have been classified and sum, including effects of monetary policy on output and the general price, effects of asset price on monetary policy operation, as well as response of monetary policy to asset price volatility. the innovations lie to: (1) it analysizes effects of monetary policy tool on output and the general price level. At the same time, it also concerns effects on asset prices. which is a more comprehensive study of the effects of monetary policy tools and referential significance for improving the monetary policy tools's collocation. (2) Try to add exchange rate variable into the VAR model, there is reference value for exchange rate formation mechanism reform and improving effects of exchange rate policy.Part II is theoretical and empirical analysis. First, it introduces some policy tools and several theories on effects of policy tool. Secondly, it overviews several theories about effects of policy tool on the output and general price, and its effect on asset prices. Finally, empirical analysis is an important content of this article. With the monthly data of 2001.01~2009.03, it establishes two VAR model to analysize IRF and variance decomposition, and gets effects of monetary policy tool on output, the general price level and it's effects on asset prices.Part III is conclusions and policy recommendations. Based on theoretical and empirical analysis, it gets the following conclusions: (1) The reserve policy has the inadequate multiplier effects and weaker immediate effects. (2) The direct control of the benchmark interest rate has more obvious effects, but transmission market is lack of a uniform. (3) The effects of open market operations is larger, but the control room is blocked. (4) The RMB exchange rate remains high, monetary policy is lack of independence. For the above conclusions, the paper proposes reform and mix of monetary policy tools and improvement of the external environment.