Transmission Mechanism Of Monetary Policy In Our Country

Whether the monetary policy transmission mechanism is smooth or not has a direct bearing on the effectiveness of monetary policy. In recent years, problems arise in economic and financial areas, such as the impeded currency circulation, the unwillingness of commercial banks to make loans, the capital deficiency faced by medium and small enterprises, which are all influenced, directly or indirectly, by monetary policy transmission. Therefore, this thesis attempts to make an exploration into some issues related to monetary policy transmission, with an aim to expose more clearly some realistic problems existing in economic and financial areas, to draw more attention to the structural and mechanistic root causes which lead to the impediment of monetary policy transmission, and thereby to provide some resources for research carried out in economic and financial areas. The object of study for this thesis is the monetary policy transmission channels in China. Based on the studies conducted by researchers both at home and abroad, this thesis makes a theoretical analysis and a empirical study of the related economic statistics.At the beginning, this thesis makes a review of the traditional theories related to monetary policy credit transmission, gives an introduction to two basic channels for credit transmission, namely, the bank lending channel and the net wealth channel. In the following, this thesis makes a theoretical but concrete analysis of the effectiveness of the monetary policy credit transmission mechanism in China in terms of central bank, commercial banks, and enterprises, points out the possibility of credit transmission channels existing in China, and makes the conclusion that credit channel is the major transmission channel in Chinese monetary policy transmission mechanism. Based on the theoretical analysis made above, this thesis employs the EViews 5.0 software to establish the VAR model and makes a empirical study of the macroeconomic statistics from 1996-2009 and methods such as unit root test, cointegration test and Granger Causality test are employed. The empirical study proves that the monetary policy affects macroeconomics through currency channel and credit channel, and credit channel plays a more important role in the Chinese monetary policy transmission. In the last, this thesis makes an in-depth discussion from the aspects of the deepening financial structural reformation, the perfection of the behaviors and system of financial banks, the enhancement of enterprises' and citizens' sensitivity to credit channel, etc. so as to put forward some proposals on further completing the Chinese monetary policy credit transmission mechanism.