The Empirical Study On Interest Rate Transmission Mechanism Of Monetary Policy

Since the 1990s, many countries have changed their macro-control targets of former monetary policies, and carried out rate as the intermediate target instead of the money supply in succession because of the new situation of economic globalization. Transmission mechanism is the core in the monetary policies, directly being related in that how the monetary policies have influences in virtual economy. And rate more suited in controllability, measurability and relativity becomes the main index in regulating economy by governments and the dominant adjusting tool in by world's major economy.Making a general survey of our country's reforming and opening process in the 30 years, monetary polices'tools and performance goals have been taking the rate's effects in consideration more and more. Transmission mechanisms of monetary policies have demonstrated diversifications, from the previous single transmission mechanism of banking credit to transmission mechanisms of banking credit, rate, foreign exchange rate and asset prices existing at the same time. Banking credit is the uppermost transmission mechanism in our country recently. Along with the interest rates accelerating the liberalization, giving full play to interest rate transmission mechanisms not only to increase the transmission mechanisms of monetary policies and achieve their expectation effects, but also can be far-reaching significant for China being response to subordinated debt crisis in due course.Theoretically, monetary policy transmission mechanism in monetary policy system occupies an important position of monetary policy. We may provide clear theoretical basis and framework to the central bank perfects macro-control by strengthening the research for the intermediary goal, the ultimate goal, and the role of monetary policy, Realistically, our financial operation does not have the real economic conditions to give up money supply like western developed countries. Now the money supply become intermediate target for monetary policy is still has the rationality of reality. But according to the economic regulation, we can not ignore the interest rates on economic regulation, besides the money supply. In the absence of other asset price effect, interest will still be important to our country economy operation.In the basis of domestic and overseas scholars long investigation and study, this paper tests the various aspects of the transmission channel of China's monetary policy transmission by using econometric knowledge with Keynes's monetary policy transmission theory as a foundation, and makes inspection results. Meanwhile the paper gives the definition and classification of interest rates on monetary policy transmission mechanism and analysis the advanced experience of developed countries monetary policy transmission. We use qualitative and quantitative research methods to study the monetary policy transmission mechanism, and use econometric analysis technology to study the different ways of monetary policy. In that way , we want to clear how China's monetary policy works in the rate way, how deep it can influence the extent influence on economic variables and can produce policy goals, and what kind of effect of China's monetary policy transmission channel where interest rates on a link, why we can't reach the expected effect of transmission.On the basis of analyzing the results what we test, we will discuss how to dredge the monetary policy rates transmission channel, in order to make the China's monetary policy transmission channels more perfect, and make the monetary policy transmission efficiency better effect. At last, we put forward the policy suggestions to consummate the monetary policy transmission channels of interest rate.