The Correlation Of Stock Price And Monetary Policy In China

There are interactive relationship between stock market and monetary policy, and it's increasingly close. The development of the stock market deeply affects the demand and supply of money, monetary policy transmission mechanism and monetary policy regulation objectives. On the other hand, monetary policy also affects stock market through the change of money supply and interest rates, etc. In China's stock market, the profound changes much today, with the research of relationship between monetary policy and stock market is of great significance. Especially after stock index futures and Margin Trading and Short Selling launched, China's stock market changed a lot, but currently there is no research on the relationship between monetary policy and monetary policy under the special background of launching of stock index futures and Margin Trading and Short Selling. This paper puts the impact of monetary policy to stock prices on this particular background, and gives policy suggestions according to empirical analysis.This paper first analysis the impact of monetary policy to stock market, especially the impact after stock index futures and Margin Trading and Short Selling launched. The impact embodied in the movements of stock price. This requires quantitative analysis combined with historical data of stock market. Second, through the above analysis, regress the data combining the background of launching stock index futures and Margin Trading and Short Selling on the basis of existing models, and do detailed analysis and explanation of theoretical basis and economic meanings to corresponding data variables and parameters. Finally, analysis the obtained results above theoretically and refine some advice on monetary policy.This paper divides monetary policy variables into direct monetary policy tools and indirect monetary policy tools under the effect of monetary policy, respectively, which is innovation of existing researches.The paper chooses some monetary policy variables which have great influence on stock market such as M1, M2, legal deposit reserve rate, credit analyses and interbank lending rates for empirical research, involving all aspects of monetary policy. The empirical results show that China's monetary policy doesn't have significant influence on the stock price, which is because of the thwarted of transmission mechanism, the control power of monetary policy to stock market is not big enough, still cannot achieve expectant control effect. The paper subsequently analyzes the reason of inadequate of monetary policy, and puts relevant policy suggestions on this basis.