The Study On The Intermediary Target Of Monetary Supply Based On Poole's Analysis In China

Choosing the Intermediary Target is very critical in the whole frame of Monetary Policy. At present, scholars of our country have done a lot of research on whether Money Supply should still be useful as Intermediary Target. These research mainly analyze the characters of measurability, controllability and relevance of the Intermediary Target. Taking the economic situation and the ultimate target into condition, this dissertation puts Poole's Analysis into practice.First, this dissertation makes an introduction of the main idea of Poole's Analysis and analyzes the basis, basic assumption and mathematic deduction of the research. For the basis and premise of Poole's Analysis are applicable, and the inflation target and exchange rate are still not suitable, this dissertation makes a conclusion that Poole's Analysis is feasible in our country.In the part of empirical study, this dissertation uses the quartered data from 1996 to 2005. The result shows that recently economic shocks in our country still come from commodity market and the most desirable intermediary target is still monetary supply. This conclusion has been proved by the test of co-integration. Second, this dissertation analyzes some factors which give rise to the inefficiency of Monetary Supply as an Intermediary Target. By doing some empirical studies a conclusion has been reached that Monetary Policy is asymmetric. So despite Money Supply as an Intermediary Target is still reasonable, Monetary Policy will be effected for the sake of the volatility of economy. Then, this dissertation finds that Money Supply itself has the statistic accuracy problem arise from the effect of financial innovation and private economy on base money, money multiplier and currency circulation speed.At last, this dissertation gives some suggestions from two aspects: optimizing intermediary transmission mechanism and optimizing money supply index in detail, i.e. accelerating the process of Interest Rate Marketing, improving the accuracy of measurement and using the new money index called Divisia.